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CEO Roundtable: Economic Development

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Springfield Business Journal Features Editor Christine Temple discusses economic development in the region with Jonas Arjes, executive director of the Taney County Partnership; Gail Noggle, director of economic development and executive director of industrial development authority for the city of Bolivar; and Dean Thompson, associate general manager of economic development and SpringNet for City Utilities of Springfield.

Christine Temple: What one word best describes southwest Missouri’s economic outlook?
Gail Noggle: Promising.
Dean Thompson: That was the word I was going to use.
Jonas Arjes: Opportunities.

From the ground up
Temple
: What are some of the recent development highlights in your communities?
Noggle: We’ve really had a good year. We have the Mercy Multispecialty Clinic, which is being built, that’s about 43,000 square feet and is going to employ about 40 full-time equivalents. Good paying jobs, about a $2 million total payroll. Citizens Memorial Hospital is always in expansion mode. They continue to be visionaries. Although we don’t have any formal plans that are being submitted at this point, we expect some expansions to occur. We have a new hotel, 61-bed Best Western Plus. Our primary retail is really handled by our developers, but we do have a new Dollar General store in Bolivar within the last year.
Thompson: We have a lot of good things going on. If you think about where downtown was several years ago, the Heer’s building and other buildings like that, the older buildings that had been remodeled, have been repurposed and they’re occupied. Then also the new development – The Vue [on Walnut], and you also have [Hotel] Vandivort building a new building. The good news is we have a very low unemployment rate. The challenge is workforce development, and I think that’s our No. 1 concern. The commercial and residential has been strong, not a large amount of growth year over year. Another side is we have low vacancy rates on industrial and commercial buildings, so that’s a challenge right now. When we’re trying to attract somebody, there’s just not a lot of stock out there.
Arjes: They started doing preview play on the Coore & Crenshaw Ozarks National golf course down at Branson Creek and Big Cedar Golf. Tiger Woods’ course is under construction and is still slated to open at some point next year. And all the other developments and continued development that Mr. [Johnny] Morris and Big Cedar Lodge continue to do in that corner of the county. We also had a new Mercy clinic just open up a few weeks ago. WonderWorks is currently under construction on 76 in the entertainment corridor. They had demolished the old Baldknobbers’ theater. Fritz’s Adventure earlier this fall opened up. H&M was a big deal on the [Branson Landing] this year. With Aquarium on the Boardwalk, city council (recently) approved a first read on the term sheet for their TIF ask.
Temple: What kind of developments do you want to attract?
Noggle: Our retail primarily is recruited by several of our really strong developers in the area, which is really in my old-fashioned opinion, the way it’s really geared to work best. The leadership in Bolivar, between our Board of Aldermen and our Industrial Development Authority, identified through strategic planning a couple of years ago five of the business sectors that we were going to focus on based on our assets and our liabilities. We identified those primarily focusing on the job creation – sustainable wages to raise a family and have benefits – so you’re looking at primarily manufacturing, industrial. We’re blessed to have such a strong medical and a four-year university basis. We have a business park that has about 68 acres. One of the challenges we have when recruiting manufacturing is that we don’t have natural gas. Bottom line is it has about a $32 million price tag. Sometimes municipalities have a tendency to focus only on what’s going to get us sales tax. To me, that’s very short-sighted.
Thompson: We have a lot of natural resources in the Ozarks, and discussion on the tourism tying different things into that, for example Wonders of Wildlife and Bass Pro [Shops] and downtown. As you draw people in with tourism, maybe people come in for Bass Pro or Wonders of Wildlife, but then what do they do after that? We’ve done very well in maintaining relationships with some, what I would call, legacy plants. If you look at Kraft Foods, a relationship with them and actually expanding a plant, but mergers and acquisitions are always a big concern. 3M last year announced an expansion and making that one of their manufacturing platforms. A manufacturer that’s been around for decades, we want to see that capital investment continue. When we’re looking at attracting, we’re looking at tech jobs, manufacturing jobs and we have a very large stainless-steel manufacturing base.
Arjes: We had a target industry analysis completed early on and a few years ago, and we just recently went through our third strategic planning process. Our focus is, like Gail said, on asset-based development from an attraction standpoint. We’re not blessed like Springfield or even up north in Bolivar to have an abundance of flat ground. The prospects of developing and building (speculative), industrial-type space is not realistic for us. But if you look at a couple of assets like The Mountain Complex, where Jack Henry does have a data center, and you look at the Branson Airport, an airport is not necessarily unique, but the ownership structure and the ease of doing business and speed to market is a distinct advantage. We’re going to focus on above-average county wage and 12-month employment.

Tackling challenges
Temple
: What are some of the other challenges and how are you tackling them?
Thompson: It’s becoming comfortable with a certain level of risk in the community, because Springfield, I think, is on the verge of something great. In order for us to look down the road and in the visioning process, there’s some risk on future things that we may be able to do. The good news is we’re conservative in our approach. We don’t just open up the coffers on incentives. I’ve been on several of the community leadership visits, and it’s really uncanny because when you go there, you get people from all different sectors (who) have a sense of understanding in their community of where the community is headed. We have no lack of resources to make that happen.But lining those up ... I think that’s really the biggest challenge. That unity of messaging.
Arjes: For us, it’s workforce. It’s not so much as a skills-gap type scenario; it’s more of the supply versus demand. We have way more jobs than we have people to fill them. The latest unemployment numbers that just came out, I think we’re two months in a row below 3 percent for Taney County. That’s the first time that’s happened since late 1999. For us to get through that, we have to have population gain. Then you get into the housing issues and transportation and child care and all those things, kind of a snowball on each other. We commissioned a comprehensive housing study that’s going to be completed and back to us in the first quarter of ’19, so we can share that data with developers and answer those [inventory] questions.
Thompson: Your [recruitment and hiring] efforts in Puerto Rico, I think that opened up a lot of people’s eyes to the challenges that you have. An innovative, really neat approach, but I don’t think most people would realize that shortage that you’d had.
Arjes: That ended up being a drop in the bucket, really. What it did was precipitate the housing issue.
Noggle: One of the challenges is getting so many starter homes going and then that next level up for that family to be able to move up and sustain themselves and stay in that community. Then it goes back to what Dean is saying about collaboration, regionalization, that is so critical and getting rural communities to understand that and buy into takes some understanding and some finesse. We can’t be strong unless Springfield is strong and vice versa.
Arjes: If you look at business attraction and you look at companies looking for a place to land and set down roots and do business, they don’t necessarily look at political lines on the map or cities and counties, they’re doing labor-shed analytics and they’re doing site searches to find out where they can be strategically located so they can drive profits. From a regionalism perspective, we share so many of the same challenges and obstacles. I quite frankly think we could probably do a better job of marketing the region.
Noggle: There’s always going to be a competitive factor on a project at some point in time. That doesn’t mean that you don’t still work together as a team and try to keep it in the region to benefit all of us.

TIF talk
Temple
: Branson has seen two big tax increment financing requests recently. What’s your position on TIF districts, and how can they be structured to serve the highest good?
Noggle: If you’re the individual trying to get their development up and going, it’s a great incentive. I don’t think Bolivar has just thrown out the incentives like crazy. Not all development is good development. You need to look at what’s reasonable for the community. On the other end, you’ve got your taxing districts that are giving up their portion of tax for a period of time, but again, if there was no development there at all, then there’s not any tax benefit for anybody either.
Thompson: They’re just another tool in your toolbox for economic development. In a perfect world, would we do TIFs? No. If nobody did TIFs, nobody did incentives, we wouldn’t need it to be competitive. We are competing for jobs. These are jobs for people in the community. Not all (TIFs) work for every project, but you have to have this diversified set of tools. One of the challenges with TIFs is that they’ve been abused by some communities. I think really nailing down if you’re truly creating an increment that’s a new increment that is going to be above and beyond what you’re generating in the community is the key question.
Arjes: I feel it needs to be needs based versus what can you provide as a public entity. There’s a lot of emotion involved because, case in point, school districts. You are taking, or perceived to be taking, their money. It’s not a very popular term. But do you want 100 percent of nothing or 50 percent of something? Quite frankly, it gets down to people. It gets down to elected leadership (and) an appointed TIF commission. If you have a motivated and passionate opposition, regardless of the project, it’s not going to go. There are bad projects that get TIFs, and there are good projects that don’t get TIFs. Look at Branson Landing. How it came to be and some of the history there may not be really popular, but look at what it’s done for the community. I think the one that is currently on the books with the city of Branson is a good project.

Building a brand
Temple
: Dean, you mentioned creating a brand to help propel the region. Do we already have a brand?
Thompson: Depends on whose lens you’re looking through. If you’re looking at site consultants, there are some site consultants, we’re not even on the radar screen. Then we have people we’ve worked with over the years, all three of us, and they know every piece of (land) in Springfield that’s available. We’re known for reliability and affordability in the industry. The community as a whole? I’d say quality of life, and the natural resources. And actually, the education and school systems.
Arjes: Branding is challenging because there’s the brand that you want to portray and then there’s the brand that you have. If you look at us specifically, Branson is a brand. There’s some recollection or connectivity with that brand. And that brand within itself has some nuances, depending on where you’re at in the timeline of life – if it’s nothing but old people in country music shows or if it is something like it is today. Springfield has the same issue. Which Springfield?
Thompson: Homer Simpson’s Springfield? [Laughs] Springfield is not a known entity, especially if you have an international company. So now they have to educate them.

Crystal ball
Temple: Cast your vision. What do you see for this region in, say, 15 years?
Arjes: There’s a lot opportunities. The millennial generation is aging and starting to have kids. The idea is that they don’t want kids and they don’t want homes. Well, that’s false. And they want to be in a good place to raise a family. I’m just very excited with what’s going on at the statewide level, which just filters down to us, and with Gov. [Mike] Parson and his focus on infrastructure and workforce development with Director [Rob] Dixon at (the Department of Economic Development.) 
Noggle: We’ve got a unique situation right now. At a state level, knowing that Rob’s been in the trenches, he knows economic development. All of us have different types of relationships with the state leadership. We like the fact the governor lives in Bolivar. That helps as far as just feeling like at least our voice would be heard.
Thompson: The future of Springfield: It’s a location for all seasons of life.
Noggle: Well that sounds good.
Arjes: I think he practiced that. [Laughs] He needs to be on the branding committee.
Thompson: It’s the truth. A decade or two ago, when your child goes through college or trade school, they want to leave the community. To me the future is, you don’t have to. We’ve got to focus on increasing the wages. One thing we’ve seen in Springfield: an (increase) of senior living. We need to have from one season of life working through the families, the starter homes and then have something in the retirement communities that’s a nice place to retire.

Excerpts by Features Editor Christine Temple, ctemple@sbj.net.

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