Quad City Times, IA

12-09-06

One agenda. One voice.

By Tom Saul | Sunday, December 10, 2006

Ask nearly anyone involved in economic development in the Quad-Cities why the effort is so important and you hear about growth of tax and population base, increased opportunity for workers, work force attraction and many other industry buzz phrases.

But lately, some who watch the growth and decline of business here say they think the effort in the Quad-Cities is sputtering. While new jobs are being created and companies invest in new facilities, some question whether the region is playing up to the level of the many competitors who are doing the same things.

“I would rate our effort as good, but not good enough,” said Jim Russell of Russell Construction in Bettendorf. “We’re not playing in the same league with some of our competitors.”

Russell was one of 27 area business leaders who signed a letter in June demanding reorganization of the Quad-Cities economic development effort. Describing themselves as “the principal private sector funders” of the Quad-City Development Group, the Bettendorf Chamber of Commerce, DavenportOne and the Illinois Quad-City Chamber of Commerce, the 27 promised “funding consequences” if there was no reorganization.

A task force composed of board members of the three chambers and the development group presented recommendations in October to reorganize, refocus and realign the work of the groups.

The three chambers have agreed to strengthen the existing Quad-City Chamber Federation, which runs a leadership academy and business networking events but have opted not to merge their operations. The development group will seek a new chief executive who will have a sharper focus on sales and marketing of the region and lead an effort to give it a more clear identity.

The four groups, in their most recently completed fiscal years, raised $4 million and spent $4.9 million on job attraction and retention, redevelopment, business climate and other activities, according to annual statements and documents filed with the Internal Revenue Service. Most of that money came from private sources, but $1.1 million came from various city and county taxpayers.

At the same time, Bettendorf, Davenport, East Moline, Moline, Rock Island, Rock Island County and Scott County spent a combined $10.7 million in the past fiscal year on economic development and related activities, according to information provided by each of the governments.

What has been the result?

That is difficult to say, according to some city officials and others. Tracking job creation is a tricky endeavor, and there is often a lack of specific information on what money spent on economic development buys.

In 2005 and anticipated through this December, 2,407 jobs were expected to be created through attraction of new companies, expansion by existing ones or retention of existing positions that might have been lost because of business closures, relocations or cutbacks, according to figures from the Quad-City Development Group, or QCDG.

The number of jobs that need to be created each year to replace those that leave or to accommodate new workers is difficult to calculate, said Thom Hart, out-going president and chief executive officer of the QCDG.

“It’s kind of a chicken or egg question,” Hart said. “Do you have to have the jobs to attract people or do you have to have the people before you can bring in new jobs?”

The figures that are available don’t always paint an accurate picture of what really happens in economic development.

There is little ability to track, except in the broadest sense, creation or loss of jobs in such sectors as retail or small business. Some firms may create fewer jobs than originally expected. Some may create more. In the case of Triumph Foods, which plans a $135 million hog processing plant in East Moline with 1,000 workers, the jobs have already been counted before the first spade of earth has been turned for construction or the first hog carcass rendered.

“We don’t specifically keep track,” said Clayton Lloyd, Davenport’s director of economic development, on the results of city partnerships with the development group and others. “There are no performance standards and a lack of specificity on what our money buys.”

With only minor exceptions, municipalities in the Quad-Cities rely on the QCDG to market the area to businesses and drum up prospects. The QCDG offers the big picture of the region to the outside world and most leads on new development come through it.

Area chambers function mainly as advocates for their memberships, aid in business and job retention in their communities, assist in work force attraction and retention and help create a better business climate locally.

Economic development efforts by local governments serve as the conduit for most aid, incentive programs and technical help. State government helps with aid and incentives, infrastructure and leads on prospects.

But there are some exceptions.

Bettendorf’s concentration on attraction of information technology business means that it conducts its own hunt for prospects, said Steve VanDyke, the city’s economic development director.

DavenportOne serves as a chamber of commerce but also is involved in downtown redevelopment, management of the 300-acre Eastern Iowa Industrial Center in northwest Davenport and growing of new businesses through the New Venture Center in downtown Davenport, said Dan Huber, president and chief executive officer.

It is the job of economic development agencies to align financial help to assist with job creation, physical, technical, government and human resources and infrastructure to make an area attractive to business and job creation, said David Lyons, economic development director for the Iowa Farm Bureau Federation who served in similar positions under Iowa Gov. Tom Vilsack and former Gov. Terry Branstad.

“Without any one of those, it’s like trying to get to grandma’s house,” Lyons said. “If any one of the bridges is out, you can’t get there.”

Some who signed the letter demanding reorganization pointed to problems they see with the area’s economic development effort. Although the Quad-Cities does well in such things as downtown redevelopment and attracting retailers, a common concern was that the Quad-Cities don’t pull together when it comes to using scarce resources and presenting a message to the outside world.

“The Quad-Cities is a place with multiple communities,” said Leo Bressanelli, president of Genesis Health Systems. “We need to take a look at the strategy we need to use and set goals. We need to be unified, so that when we focus our talent and resources, we are all focused on the same agenda and we speak with one voice.”

Hart said the group already provides value for its donors and the Quad-Cities. In its 2005 annual report, he cited $137 million that activities of the QCDG contributed to the area’s economy at a cost of less than 1 percent of that amount.

Hart also rattled off figures about other activities of the QCDG, including “our new, aggressive sales and marketing campaign which saw visits to 20 cities and Europe to sell the region, 2,348 contacts, 287 appointments, 83 site visits and 17 successful business expansions.”

The mission of the QCDG is threefold, Hart said:

n It markets the Quad-Cities to the outside world to attract companies that want to open new operations.

n It helps existing businesses here to expand and grow.

n It helps make sure there is a business climate that fosters growth.

Leads come in and, once the QCDG learns that the region is in the running for a new business or expansion, it offers data and information and markets the region “in a way that makes sense” to the prospect. It also makes sure the prospect matches up with industries the region wants to bring in and the skills of its available workers, Hart said.

The group also tries to benchmark what it is doing right and wrong by holding regular meetings to review its efforts to create jobs and business, Hart said.

As a result, Hart said, the Quad-Cities gets its money’s worth from the agency in terms of business and job growth. The agency is on the way to one of its best years ever in terms of job creation, according to a report that offers a decade’s worth of data on business relocation, expansion and retention in the region.

At best, economic development is more of a crap shoot than an exact science, said David Swenson, a scientist and lecturer at Iowa State University’s Department of Economics who has done research for the QCDG to identify the area’s strongest industries and how it can be most competitive with other areas.

Those involved in economic development are usually mere brokers of information and organizers of infrastructure, Swenson said. Although they have a tendency to take credit for every job created in their area, “all they can truthfully say is that they were instrumental as part of any discussions. Everything is up to business and what its plans are,” he said.

The Quad-Cities is still trying to work its way out of crushing job and industry losses from the 1980s when the farm economy hit the skids and dragged the region down with it, Swenson said. In the past 18 years, the Quad-Cities have added 21,000 new jobs, a strong performance but not as good as other regions of Iowa where the impact of the decline in farming wasn’t felt as severely.

“That’s good, but not as good as in Cedar Rapids or the Des Moines metro area,” Swenson said. “They’ve added more jobs that attract young families. You’ve worked hard at economic development, but you haven’t gotten as good a return on your efforts.”

Tom Saul can be contacted at (563) 383-2453 or .