Selling vs. Positioning

When a large economic development project is announced, many often assume that the happy result came from someone going out making their best sales pitch to reel in that company.  Perhaps that is true, but nothing can out-sell the lack of product in a community.  A successful sales pitch is only made possible as a result of a community investing in infrastructure and landowners and developers supporting land assembly.

The commitment to the development process rather than just the sell is called “positioning”.  The salesperson, usually an economic developer or appointed community leader, is often the most visible participant in the final stages of the deal when the project is introduced to the community.  But the years of investment by multiple partners which preceded the business project is the most important component of the deal.  Usually communities make investments years in advance not even knowing what companies they will secure in the community, or even target, but still make these investments with the mindset that companies need access to utilities, transportation and land. 

Without a plan to connect utilities or support the usage demands of a commercial or industrial client, the effort to recruit business is all for naught.  Similarly, unless there is a landowner willing to work with a community to receive the infrastructure or sell to an interested business investor, the salesperson trying to bring in business is better off watching re-runs of Super Bowl XLVIII than trying to recruit jobs.

As an example, during the summer of 2011, Cumming made a big announcement that they were taking a major step forward to grow as a community.  Two years later, people often ask me “What happened to Cumming?”  The community is positioning themselves to reach their potential, I respond, and the city leaders no doubt are committed to community growth through those investments.  While this might not be the gazelle approach that many of us would like, it is the more responsible and thoughtful approach – and it will pay off. 

At present Cumming is working to invest in a Phase Two wastewater project which will allow the original part of their community to be connected to the Wastewater Reclamation Authority which has the additional benefit of predicating a Phase Three extension towards Interstate 35.  Properties in the latter area have been called by some area leaders as the most attractive parcels for development in the Des Moines Metro region.

Another example is Summercrest Park in Indianola.  Developers have successfully landed a number of great employers for our community.  But without the cooperation of the Picken family, or partnerships between the City and utility partners along with the expanding businesses in that park, nothing would differentiate the land on the north side of Indianola from anyone else’s land.

Developers with properties along the Highway 5 bypass, including Warren County sites in Carlisle and Des Moines, hope for similar results as they “position” their properties for success.  One way to position Highway 5 is to re-designate this section of highway to a new interstate highway, which has the support of a large regional coalition which includes Warren County.  Even if we have the best campaigns and spend the most dollars to attract activity to Warren County, we can only sustain success for the long-term by working and planning methodically in this matter.

Legislature Impacts Warren County Economy

The 2014 Iowa Legislative year is full swing.  I like to pay attention to the business at hand, especially with the Iowa State Capitol being so literally near to Warren County. 

Of particular interest are those issues that relate to enhancing economic growth in Iowa.  The Warren County Economic Development Corporation (WCEDC) is a member of the Professional Developers of Iowa (PDI), which champions issues in that regard.    

The Professional Developers of Iowa is a grassroots, non-partisan association of economic developers across Iowa.  Membership includes economic development groups like WCEDC, but also city and county development officials, state and regional development groups, utility partners, state workforce development officials, and community college leaders.  In addition to advocacy, PDI aids in the professional development of its members so that economic developers provide strong, effective leadership across Iowa communities.

The Professional Developers of Iowa annually compiles a set of legislative priorities into an agenda.  The WCEDC board in December opted to endorse the PDI legislative agenda for 2014.  Key issues include:

·         Preserve Tax Increment Financing (TIF) as a strong economic development tool.  Norwalk recently utilized TIF to attracted 165 new jobs with the Loffredo Fresh Produce project and another 60 jobs in Carlisle by attracting a Fareway grocery store.  The City of Indianola was able to utilize TIF to attact and build a new YMCA, an overwhelming popular project which already has nearly 2,500 memberships and 5,500 total members (in less than a year).

·         Raise funds for our highway transportation system.  The State of Iowa has hundreds of millions of dollars in backlogged priorities, and cities and counties have shelved many projects s due to a lack of funding.  Iowa has some of the most deficient bridges in Iowa, and Warren County is among the leading counties for total number of bridges which need work.  Additionally, the fate of Warren County’s economic growth is largely tied to transportation investments, particularly regarding Highway 65/69, Highway 92, Interstate 35, the Southwest Connector, and Highway 5/65 interstate re-designation.  Whether that funding "vehicle" is a gas tax or some other means, now is the time to fund our transportation system, providing for public safety and economic development.

·         Support job training programs.  Iowa’s economy is improving and Warren County’s unemployment rate is low - 3.5 percent in November.  A number of employers are having a hard time filling jobs.  Many of these jobs include technical positions, which as construction trades, nurses, auto mechanics, HVAC technicians, and welders.  These positions are not only crucial to a growing economy but also for keeping more dollars from leaving Warren County.   WCEDC encourages the Iowa Legislature to continue funding job training programs offered at DMACC and other educational institutions.

·         Fully fund the Iowa Economic Development Authority and the tools at their disposal for attracting new jobs.  The Iowa Economic Development Authority (IEDA) led by Director Debi Durham and her team are on the front lines selling Iowa as a destination for expanding businesses.  The businesses IEDA brings to Iowa provide an economic stimulus and more revenues for Iowa communities and our State, which contributes to the great quality of life and opportunities that we all enjoy.

·         Create a simpler income tax structure.  Iowa has a high corporate income tax, which particularly affects those companies that sell products in Iowa.  Federal deductibility helps lower the tax liability for Iowans somewhat, but is confusing to outsiders who might want to invest in Iowa or bring projects here.  Simplicity is needed.

Though inevitably voters will be reminded that 2014 is an election year and bold initiatives will not be undertaken this year, we hope that our legislative leaders will continue to dialogue on these issues of interest. Iowa is a great state, and these issues can make it even more competitive.

Comparing Iowa’s Incentives to Lure Jobs

States for years have competed with one another to lure jobs.  Seeing that each year there really are only a few hundred bona fide deals nationwide and thousands of communities and development organizations chasing these projects, it is no wonder why the states desire to come up on the winning side. 

To draw an analogy, why is a professional baseball organization willing to shell out millions of dollars to sign the latest hot free agent outfielder who can slug 40 home runs?  Answer: to sell tickets and win ballgames, which attracts more "green" to the ball club's owner.

A similar perspective applies to economic development prospects.  Attracting a company which brings, say, 200 good-paying jobs to your state, with employees who pay taxes, buy homes and put kids in schools while buying goods and services - this is called a multiplier effect.  So communities and states generally extend themselves to attract such opportunities.

In recent years, however, as states have experienced tighter budget constraints, there has been an increased amount of scrutiny over how states are divvying out taxpayer funds for this purpose.  The term “corporate welfare” is commonly thrown out as a way for critics to position incentives in the worst possible light.

So how does Iowa rank relative to other states related to incentives?

The Iowa Chamber Alliance, which represents the 16 largest Chambers of Commerce and economic development organizations throughout Iowa, has recently stepped up to the plate to shed some light (and data) on this topic.  Unless facts are presented there just is no way to have a sensible debate.  To that end, the Chamber Alliance’s study was completed and conveyed to the Iowa Legislature in March 2013 with the assistance of Deloitte Consulting, called “Benchmark Comparison of Iowa Incentives”.

The study examined Iowa’s incentives in comparison to those offered by Minnesota, Nebraska, South Carolina, South Dakota, and Texas.  Iowa competes regularly with several of these states on projects.  Further, several states are renowned for offering strong incentive packages to lure jobs.

As one incentive tool, Iowa is behind the other states relating to corporate tax exemptions.  Iowa companies pay little to no income tax if customers are out of state.  Companies with in-state customers, however, face a very high tax burden.  The companies most affected are those firms that produce or supply products to Iowa manufacturing companies who then sell products to customers in other states. The Iowa Economic Development Authority has attempted to address this issue lately with the Iowa Legislature.

Regarding another issue, Iowa does provide sales tax exemption on utilities used in manufacturing; however, the sales tax refund for construction materials is only available through certain programs, minimizing the available impact to all businesses.  Nebraska and Texas provide a higher level of exemption flexibility than does Iowa.

Perhaps the area that gets the most attention nationally is what is called a “deal closing fund”.  These are discretionary funds given by a state to seal a deal, and are typically sought by corporate investors due to flexibility and the immediate impact on upfront project costs.  Iowa allows the company to go through a competitive application process, but other than Nebraska, Iowa is the only state NOT to have a deal closing fund.

The lack of a deal closing fund can be frustrating for Iowa in cases where the state has done everything it can to close the deal, except for having a few extra dollars to land the project which another state might have.  Texas and South Dakota are two states which stand out in this regard, Governor Rick Perry of Texas in particular being noted for his aggressive approach to recruit businesses out of other states.

The debate over the value of incentives to land businesses is unlikely to go away anytime soon.  But in the interest of public education and transparency, there is a strong need to know the value of these incentives and to understand whether the public is getting their money’s worth in such deals.  Nonetheless, the Iowa Legislature would be wise to evaluate such studies and determine how Iowa can compete most effectively to attract the few high-value businesses looking to expand in 2014.

Warren County Well-Represented with ‘Book of Lists'

The Des Moines Business Record annually prints the ‘Book of Lists’, which serves as a coffee table fixture around the Metro while conveying information on a number of leading organizations, businesses, people, and communities.  Everyone likes to see themselves on one or more of the “lists”.

The full 2014 ‘Book of Lists’ can be found here, but Warren County is represented in a number of different places.  Here are a few notable mentions:

Ø  The Des Moines Metro Opera in Indianola named among the top 50 nonprofit organizations.

Ø  YMCA of Greater Des Moines is the #1 health and fitness organization in Central Iowa, with 1,460 employees in 12 locations, including Indianola.

Ø  UnityPoint Clinic in Norwalk named among the top providers of family medicine.

Ø  WesleyLife, of which The Village in Indianola has association, recognized as the #1 retirement community in Central Iowa, 287 beds and 94% occupancy rate, 144 FTEs.

Ø  Good Samaritan Society in Indianola is the #9 retirement community, with 131 beds and 85% occupancy rate, 92 FTEs.

Ø  Vintage Hills retirement community in Indianola is the #17 retirement community, with 46 beds and 70 percent occupancy rate, 10 FTEs.

Ø  Countryside (now Warrior Run) and Echo Valley, both in Norwalk, listed among the top golf courses.

Ø  The Indianola, Norwalk, Carlisle Chambers of Commerce listed among the region’s chambers (508 total members).

Ø  Norwalk resident Tucker Anderson is CEO of Ultimate Nursing Services, the #20 largest non-governmental employer, with 725 full-time employees.

Ø  Hubbell Realty named among the oldest businesses.

Ø  Noble Ford of Indianola is the #2 minority owned business, with Nick Nichols as owner.

Ø  Darr Land Consultants, owner Bob Darr of Warren County, is the #21 business consultant.

Ø  SVPA Architects (led by Indianola resident Steve Gray) named #13 office interior firm.

Ø  Noble Ford of Indianola is #14 on the Auto Dealers for number of employees, with 60.

Ø  Watters Autoland of Indianola is ranked #17 on the Auto Dealers list for number of employees, with 24.

Ø  Harvest Innovations of Indianola is #8 on Agribusiness list, with 69 employees.

Ø  MidAmerican Energy is the #3 manufacturer (energy generation), with 953 full time employees.

Ø  Simpson College is in the top 10 among colleges and universities.

Ø  Des Moines Area Community College is ranked #4 college / university, with 7,735 full time students.

Ø  Legacy Business Park in Norwalk among the top business / office parks in Central Iowa.

Ø  Indianola YMCA is the #20 construction project.

Ø  Legacy Landing of Norwalk is the #24 construction project.

Ø  DCI Group in Indianola among leading construction firms with $65 million in construction projects in 2012.  A few notable projects were Indianola Schools, Department of Administrative Services, and Principal Financial.

Ø  Hubbell Realty is the #2 developer, among them projects in Norwalk and Carlisle.

Ø  Knapp Properties is the #5 developer, with land throughout northern Warren County).

Ø  Three-Sixty Group is #19 developer, with Summercrest Hills being a notable project).

Ø  SVPA is the #6 architecture firm.

Ø  Snyder & Associates (led by David Moeller of Indianola) is the #3 land scape architect.

Ø  Ted Lare Design Build of Cumming is the #6 landscape architect.

Ø  Baker Electric, the company of Norwalk resident Britt Baker, is the #2 mechanical and electrical contract company.

Ø  Snyder & Associates is the #1 engineering firm.

Ø  Veenstra & Kimm, which does a lot of work in Warren County including for the City of Cumming, is the #1 engineering firm.

Ø  McClure Engineering (which does a lot of Warren County projects) is the #6 engineering firm.

Ø  Terrus Real Estate which includes Norwalk native Bill Wright, is the #2 commercial real estate firm.

Ø  Peoples Company, owned by Norwalk native Steve Bruere, is the #3 commercial real estate firm.

Ø  Colby Interests, which is developing a lot of land in northern Warren County, is the #14 commercial real estate firm.

Ø  Three-Sixty Group is the #14 commercial real estate firm.

Ø  Hubbell Realty is #2 commercial property management firm.

Ø  Knapp Properties is #6 commercial property management firm.

Ø  Terrus Real Estate is the #3 commercial property management firm.

Ø  Hubbell Homes is the #1 homebuilder.

Ø  Darwin Smith (and now Exit Realty), led by Jon Niemeyer in Norwalk, has the #7 residential real estate firm in the metro.

Ø  Peoples Company is the #7 residential real estate firm.

Ø  RE/MAX of Indianola among the top residential real estate firms

Though I likely missed someone, as you can see there is a lot of representation by Warren County in this year’s ‘Book of Lists’, showcasing yet again the strength and clout of the 'Southern Gateway' into the Des Moines Metro area.

Warren County is Great (but don’t take my word for it)

Warren County is great.  Those of us fortunate to call Warren County “home” count our blessings to reside in the ‘Southern Gateway’ to the Des Moines Metro.  We have the best schools, a great quality of life, and are connected to both small town living and big city attributes.

Warren County is a 'Great Place', literally.  A group of area leaders worked with the Warren County Economic Development Corporation several years ago (during the Vilsack Administration) to achieve the "Great Places" designation, one of the first “places” in Iowa to do so.

Additionally, a lot of famous people have connections to Warren County.  George Washington Carver is known for his contributions with Iowa State University in Ames, but the famous inventor also attended Simpson College in Indianola.  In fact, some of us refer to the Indianola to Ames connection as the 'Carver Corridor', a name which has been used to brand Indianola's startup community.  The list of famous people and their connection(s) to Warren County is lengthy, but best saved for a future article.

And those outside of Warren County are also beginning to understand the greatness of our beloved county.  In the past couple of weeks a group called ‘Movoto’ came out with a story called “These Are The 10 Best Places In Iowa”. 

I know very little about Movoto.  Their website reveals that Movota has a real estate blog and might even buy and sell real estate, too.  And why this group decided to take an active interest in Iowa places I have no idea, though it appears that the group intends to compile similar lists for other states. 

Nonetheless, when a group comes out with a “best of” places list, unless Dennis Rodman is responsible with the rankings, chances on you want to be on it.

Interestingly enough, among the top ten are eight Central Iowa cities.  Warren County has one community on this list (Norwalk at number six).  Expanding the list a little further finds that Indianola is #12 and West Des Moines is #14.

Based on that description, one wonders whether or not Movoto performed their analysis of Dallas and Polk counties and skipped Iowa’s other 97 counties.  Movoto, however, took the following factors in consideration for their ranking:

·        Cost of Living

·        Crime

·        High School Graduation

·        Median Household Income

·        Median Home Value

·        Median Rent

·        Employment

Movoto Real Estate analyzed the 81 communities in Iowa with a population above 5,000, rather than all of Iowa’s roughly 950 cities.  Norwalk performed best in the area of ‘Median Household Income’, ranking eighth.  Next best was ‘High School Graduation’, ranking 12^th.

Indianola performed best in the category of ‘Median Household Income', ranking 17^th.  Like Norwalk, Indianola’s next best category was ‘High School Graduation’, ranking 19^th.

West Des Moines, which has grown into Warren County in recent years, achieved a #14 ranking largely due to two factors – ‘High School Graduation’ and ‘Median Rent Price’, both second among the Iowa communities evaluated.

It is a bit surprising that West Des Moines is not rated higher overall, considering that the city is ranked fifth overall for ‘Median Home Value’ and tenth for ‘Median Household Income’.  West Des Moines, however, ranked 70^th for ‘Cost of Living’, the primary reason for holding the city back a bit.

Oftentimes we talk about how great a place Warren County is to live, work, and raise a family.  Skeptics might charge that of course we say that, everyone says that about their place.  When someone with no ties to Warren County says it, however, our claims are given enhanced credibility.  Now I just need to learn more about Movoto.

Neighbors Cooperate and Grow

On one of the coldest days in recent Iowa history, it is nice to have a heartwarming story.

The idea of two neighboring cities sharing a boundary and cooperating on land use concerns is rarer than one would think.  Infrequent enough that it is worth pointing out when it happens.

The two communities involved are gazelles.  Cumming is one of the fastest-growing small communities in the Metro (117 percent growth in the last Census).  West DesMoines is one of the fastest-growing larger cities in the Metro (22 percent growth in the last Census).

As part of the deal completed in late October, the cities signed-off on a Moratorium to not annex land beyond agreed-to boundaries for a ten year period.  The agreement also aims to avoid duplication in the review of plats on unincorporated land.

The cities are both expected to continue growing, and recent commercial and residential developments already underway in northwest Warren County and northeast Madison County back up that statement. Building permits are selling monthly for West Des Moines' new single-family housing development, called Fox Valley, and Cumming has experienced small business and high-end single-family growth in recent years, too.  A number of horse barns and small farms are present and popping up in this area, showcasing a great quality of life feel.

These cities also have joint interests in transportation planning.  Big plans exist for the Southwest Connector, which impacts both communities as well as multiple counties.  West Des Moines has finished work with Des Moines on a section of Southwest Connector to the north and east, and Warren County is finishing a study to take the Connector south and eventually west into Madison County.  The Iowa DOT is completing major improvements along Interstate 35 between Cumming and West Des Moines, which adds another highway lane as well as new interchange where Interstate 35 and G-14 meet.  Developers such as Knapp Properties have development interests in this area. 

Cumming is working through plans to upgrade the community’s wastewater infrastructure, especially necessary for any development project along Interstate 35.  The Cumming city council has also recently approved updates to the City’s comprehensive plan.  Cumming leaders held an event in 2011 touting Cumming’s future as a development destination.  The community already boasts attributes such as Ted Lare Design, the GreatWestern Trail, Howell’s, Iowa Distilling Company, and the Cumming Tap.

The cooperation between Cumming and West Des Moines should pay dividends down the road as developers weigh investment considerations.  

Highway Investments Drive Economic Future

What is the economic value of an improved highway?  The citizens of Indianola, and much of Warren County, are about to find out this year - twice!

Indianola City Manager Eric Hanson recently suggested that the City’s investment in transportation infrastructure is necessary to provide safety, constant access, and accommodate community growth.

For months, the City has deemed Highway 65/69 on the north side of Indianola an imminent priority.  Traffic counts along this route have continued to grow, just as Indianola’s population continues to grow.  Also, roughly 80 percent of Warren County’s workforce population travels out of the county for employment, mostly northward, which puts further strain on this area’s infrastructure. 

Too, Summmercrest Hills has become one of the most successful business parks in the Des Moines Metro region, with a total investment closing in on $50 million over the last several years from projects such as new Mercy Medical and UnityPoint clinics, Theisen’s, the YMCA, Greater Iowa Credit Union, Vintage Hills Retirement Living and Cooperative, and Indianola Family Dentistry.  Developers expect even more projects soon.

This activity has added up to a “perfect storm” on the north side of Indianola.  The City of Indianola has leveraged about $815,000 in grants to help finance the project, but the project is moving forward in large part because Indianola has to fund the lion’s share. 

The public has clamored for right-turn lanes off of Highway 65/69 for some time, especially near the automotive dealerships, and for the north and southbound lanes to be level with one another.  Improvements to Hillcrest are also in store, as the shoulders are presently too narrow.  Additional stoplights will be added and the speed limit will likely be reduced, in due time.  The City has visions of extending Hoover from the east and west in the future, which will begin to shape an urban corridor for the community.

Even more interesting for Indianola is that while project ‘bidding and letting’ occurs this April, Highway 92 construction going west from Indianola should be starting about the same time.  The Iowa DOT is currently purchasing right-of-way access for the project.  Detour routes for Indianola residents coming in and out of Indianola will be created during the construction period.  Officials in Indianola’s Community Development office say that minimal widening will occur while shifting Highway 92 to the south to straighten the curves further to the west.  Additionally, sidewalks will be added from the Warren County Fairground entry to Spruce Street, with a recreational trail continuing on the north to county Highway R-63.

Highway 92 holds much promise for the area’s economic future.  While this stretch does not experience the same degree of traffic volume, Highway 92 is Warren County’s primary east-west connection to Interstate 35, the latter of which runs from Minnesota and Mexico.  This connection enhances Indianola’s appeal to transportation and manufacturing businesses that rely on shipping goods across country.  

More locally, Indianola hopes to capture retail leakage from southern areas, a response to local shopping dollars shifting northward to Des Moines and West Des Moines.  The recent ‘Buxton Report’ commissioned by the City of Indianola, and supported by community development partners such as Warren County Economic Development Corporation, estimates that the counties immediately south of Warren County to the Missouri border have $325.8 million in retail sales which are unfilled in the local area (their leakage), sales of which could be fulfilled by communities such as Indianola.  With most of the alternative shopping options being north, could Indianola be that new stopping spot?  An improved Highway 92 can only enhance those opportunities for Indianola and Warren County.

These 2014 highway investments are setting up to shape Warren County’s economic future in a big way.