Dean Barber

Seeking the Right Balance

In Corporate Site Selection and Economic Development on May 26, 2015 at 11:17 am

I take no glee in the suffering of others. Indeed, the older I get, the more compassion I have for those who find themselves in difficult circumstances. Yep, I’m a real softie.

So I couldn’t help but feel a bit sorry for four economic developers who I met with a few weeks ago at a restaurant near my home here in Plano, just north of Dallas.

You see, they were from California.

Now let me say from the outset that they should be commended for making the trip to meet with site selection consultants. That shows gumption on their part, and I admire that.

The fact is I meet with economic developers all the time who make the trek here to meet with companies and consultants. I’ll be meeting a group from Ohio later this week.

But I can tell you that the California Central Valley Economic Development Corp., encompassing an eight-county region, is the first group that I’ve ever met from the Golden State. And I’ve met with a lot of ED groups in my time.

Now that in itself should tell you something.

Hang in There

About halfway through our conversation, it dawned on me that I had never met with a group of economic developers who were almost apologetic for being from where they were from, although I will tell you now that they have achievements to point to.

They freely acknowledged that California’s business climate is not up to par because of both high taxes and over-regulation. And they know that some companies have picked up stakes and moved out of state as a result.

(Where we were meeting in a restaurant in Plano was about one mile from the construction site of Toyota’s new North American headquarters, soon to vacate Torrance, Calif. I don’t think I mentioned that to them. I may have.)

But the point is that I really felt for these folks. I really did.

I almost wanted to put my hand on a shoulder and say, “It’s Ok. Things are going to get better. Hang in there.”

Most economic developers are an optimistic, even cheerful lot, who have sold themselves on the idea that their communities are special if not worthy of just about every capital investment project under the sun.

Actually, most don’t believe that, but there is this matter of appearances, especially when local politics come into play. Sometimes economic developers have to play along to get along to keep their jobs.

An Oasis in the Desert

If there was any solace, the group from California assured me and consultant Tim Feemster, who was also present, that the Central Valley was a virtual oasis, a business friendly place surrounded by a man-made hostile environment, as in laws and regulations.

And they had an impressive list of projects in all eight counties that they could point to in which companies had announced, broken ground, bought or leased space thus far in 2015.

And when I say impressive, I mean top names like Cargil, Tesla Motors, Google, Amazon, FedEx, and a whole bunch of others, some of whom I know and some of whom I don’t.

Clearly they could show that business investment was happening at a pretty good clip in their region.

We talked a bit about the water situation in California, and there wasn’t much encouraging news on that front, so we let it drop. It is what it is.

Not Happy Campers

I got that same sentiment – a resignation to a harsh reality — a week later, after the California economic developers had returned home, during telephone conversations with aerospace manufacturing execs in Southern California. As a group, they were not happy campers, but it is what it is.

One, the president of a manufacturing concern near Los Angeles, used the word “sick” and “onerous” to describe the local business environment. He said many of the regulations that his company complies with “don’t make sense,” but the cost of moving lock, stock and barrel was deemed to be prohibitive.

I almost said, “It’s Ok. Things are going to get better. Hang in there.”

But I didn’t.  I only hope that it does.

I Talk and Sometimes People Listen

I also did a little speechifying in Louisiana last week. I gave a 30-minute presentation to stakeholders of the Central Louisiana Economic Development Alliance on the digital evolution/revolution that is happening in manufacturing.

The title of my presentation: “Coming to a Factory Near You.”

But before I could address my audience in Alexandria, La., I gave two separate interviews with the local television stations, which obviously were hard up for anything that smelled remotely like news.

Boiling a 30-minutes talk that was in my head into a sound bite, which was all the TV folks really wanted, was a bit challenging. I had to quickly get my thoughts in order, all the while knowing that a brain can lock up in the harsh lights of a television camera.

From experience, I was aware that I could come across as a babbling fool. The last thing I wanted to do was to embarrass my host, CLEDA, which was paying me to be there.

The Coming Robots Wars

So I came up with my story line, which was that robots were going to kill us all. Just kidding. I didn’t say that.

What I did say was that a future wave of robotics will put some people out of work, while creating jobs for others. A mixed bag as it is for most things.

Now if you want me to speak in your community, I am willing and able. Just know that my speechifying for does not come for free, especially if TV cameras are present to tax my brain.

A Different England

Before my talk to the stakeholders in Alexandria, I got a very worthwhile tour of nearby England Airpark, which was created with the closure of England Air Force Base in December 1992.

A scant three years later, it is operationally self-sufficient under the England Authority, an economic development organization charged with transforming the base into a commercially viable place to do business. It’s essentially a big industrial park.

And to date, the England Authority has a string of wins under its belt starting with commercial air service in 1996. Then Union Tank Car opened in 2005 (650 jobs there), followed by the opening of three separate terminals in 2006 (commercial); 2007 (military); and 2008 (a fixed base operator.)

In all, about $200 million in improvements have been made at Alexandria International Airport, which I found to be aesthetically pleasing with its architecture and user friendly.

As impressive to me is the fact that England Airpark has two certified sites, and two others in the process of being certified, with the ability to assembly a mega-site of 1,500 acres if that is what is required.

A Mega-Project on the Horizon

But what is on everybody’s mind is the prospect of announced project coming into being in Pineville, right across the Red River from Alexandria.

There is where American Specialty Alloys says it will build its first production facility manufacturing aluminum alloy for the automotive and aerospace industries, a $2.4 billion investment.

ASA says it will break ground on the former site of an International Paper mill later this year, with a targeted completion date in 2020. The facility is expected to employ 1,450 people at an average salary of about $70,000, and create 2,000 construction jobs.

Leave it to say, there is optimism right now in Central Louisiana, even if been dark clouds hovering statewide concerning the state’s budget.

Cuts Will Come

With tax revenue from the oil industry falling short of projections, Louisiana’s deficit has swelled to $1.6 billion for the fiscal year that starts July 1.

State lawmakers have been scrambling and the situation remains murky. But if I am reading the tea leaves correctly, cuts will likely come across public health care services, state parks, museums and agricultural services. It won’t be pretty for some.

Still, I must say that I have a much higher opinion of Louisiana’s business climate today than I did in the past. It wasn’t that long ago when there appeared to be an almost in-your-face atmosphere of public corruption.

That’s not the case today, as the state has pretty strong disclosure laws on the books. Which tells me that lawmakers can make a positive difference if they are not in somebody’s back pocket.

Good Attracts Good

I have always believed that good government and good business practices can coincide in the same place and at the same time.

Too little regulation, and you get bad actors doing bad things. Witness Wall Street 2007. Too much regulation, and companies flee. Witness California today. There’s got to be a balance.

A special thanks to my hosts in Alexandria — Jim Clinton and Rick Ranson with CLEDA, and Jon Grafton and David Broussard with England Airpark.

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a location advisory and economic development consulting firm based in Plano, Texas. He can be reached at dbarber@barberadvisors.com or at 972-767-9518. If you liked what you read here, invite him to speak at your next meeting.

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