f overcoming adversity is the path to success in economic development, then the Top Groups of 2010 wrote the book on it.
From dealing with the aftermath of hurricanes and spilling oil to rebuilding a city's industrial infrastructure, the top-performing economic development organizations in the U.S. rose to the challenge, and more, last year.
In at least one case, a top economic developer partially credits adversity with providing the impetus for change.
"A major event like Hurricane Katrina shakes the entire state to the core and causes us to focus on the right priorities," says Adam Knapp, president of the Baton Rouge Area Chamber. "It really forced people to come together and use strong cooperation. We created a partnership that had never happened before between Baton Rouge and New Orleans. If these two regions can work together on projects, there is nothing that cannot be accomplished."
Five years after Katrina, and then Hurricane Rita, devastated the Gulf Coast of Louisiana, the state's capital city turned in one of the more remarkable economic development performances in America in 2010 — hauling in a record $4.4 billion in capital investment and creating 2,032 jobs for Baton Rouge area citizens.
Like Baton Rouge, the other winning community organizations on this year's list of Top Ten Economic Development Groups of the Year demonstrated uncanny resiliency in overcoming hardship. From Detroit combating the ills caused by the historic collapse of the American automotive industry to Chicago moving past the rejection of the International Olympic Committee, the winners of 2010 didn't let setbacks define them.
Instead, they pressed on and, in many cases, secured record amounts of capital investments and job creation — two critical criteria in Site Selection's annual ranking of the Top Groups. We also looked at investment per capita, jobs per capita, creativity of economic development strategy, the depth and breadth of project activity, the ability to generate breakthrough deals, and the ability to properly document the contributions of the economic development organization to actual project results.
In alphabetical order, here are the Top Groups of the Year:
Baton Rouge Area Chamber
Baton Rouge, La.
nchoring a state that produced the biggest turnaround in the country last year, Baton Rouge showed a depth of industrial expansion unseen anywhere else in the country. Projects came from petrochemical manufacturing, paper mills, plastics and resin manufacturing, motion picture production, chemical manufacturing, lithium-ion battery production, industrial gas manufacturing, steel-making, logistics and many other sectors.
It all added up to $4.4 billion in project activity and new jobs for more than 2,000 of the capital region's residents.
"The fundamental strength of our economy is our labor pool," says Knapp. "We have maintained a strong economic base because of our work force. Even though the country was in a deep recession, the state did not back off any of our major incentive programs, and we made sure in Baton Rouge that we kept our overall organizational funding in place. We actually increased our marketing budget during the downturn. We maintained a strong presence at trade shows, online and in our lead-generation strategies. While other people were retrenching and pulling back, we were able to stay out there."
Stay out there, they did. Georgia-Pacific announced a $397-million paper mill expansion in Zachary, while Exxon Mobil announced a $362-million petrochemical manufacturing expansion in Baton Rouge.
These big investors were joined by BASF Corp. and Westlake Chemical Corp. in announcing projects in excess of $300 million.
"The breadth of our industries is truly remarkable," says Knapp. "We had success in digital media, wood products, advanced manufacturing and many other sectors last year. We are proof that diversification can work."
ith $814 million in capital investment and 8,228 jobs generated throughout the Charlotte region, the Charlotte Chamber of Commerce and the Charlotte Regional Partnership rank among the top five groups in the country in job creation.
"It really goes back to the amount of resources that we put into our marketing and our economic development activities," says Ronnie Bryant, president and CEO of the Charlotte Regional Partnership. "We made the decision in 2007 to increase our economic development marketing budget rather than allow budget pressures to reduce our efforts. Going into a recession, we knew that projects would be scarce, but we felt that more resources in marketing would put us into position to land more deals."
The strategy paid off. Goodrich, General Dynamics and BAE all followed with large investments, as did a number of smaller companies. Charlotte became the energy capital of the South and the nuclear engineering hub of the country.
Siemens Energy's project in Mecklenburg County, announced last year, became the largest manufacturing project in Charlotte since IBM in 1978.
Jeff Edge, senior vice president of economic development for the Charlotte Chamber of Commerce, says, "We had to make ourselves a little more competitive than our competition. We also worked to make our area more business friendly. The most important factor in the success of our region is the commitment of state and local government to capital investment. We support projects."
Edge says Charlotte overcame adversity of its own in 2008, when Wachovia was taken over by Wells Fargo. "That was a huge wake-up call for us," he says. "We had to look at the financial services industry. Back then, we weren't known for much more than the banking industry. We needed to get the word out that we were much more than banking, and we have done that."
Cincinnati USA Partnership
he Cincinnati Reds broke a 15-year-long drought by winning the National League Central Division and advancing to the Major League Baseball playoffs in 2010. Their hometown economic developers accomplished a similar milestone by shrugging off years of industrial sluggishness and producing an unprecedented performance.
Capturing $2.1 billion in capital investment and generating 4,698 new jobs for greater Cincinnati residents in parts of three states, the Cincinnati USA Partnership hit the proverbial home run of economic development.
"We have built a great network of economic developers in the region in 30 different communities," says Neil Hensley, senior director of economic development for the Cincinnati USA Regional Chamber. "This includes communities in Ohio, Kentucky and Indiana. We all get together on a regular basis and decide how we are going to promote the region. We have also built a really good network of private investors throughout the region, including a committee of 40 people who help us with our existing industry base. Last year, they went out and met with over 400 companies in our region. That was a 40-percent increase from 2009."
Those visits paid off in the form of some huge expansion projects. Keidel Supply announced a $400-million distribution warehouse expansion in Cincinnati, while Middletown Coke Company announced a $385-million manufacturing plant expansion in Middletown, Ohio. Other major expansions came from Ford Motor Co. in Sharonville, Ohio, Zf Steering Systems in Florence, Ky., and General Mills in Sharonville.
Cincinnati, a city with a rich German history and influence, is also scoring on the international scene. "We had investments from eight different countries from outside the U.S.," says Hensley. "We had investments from India, the U.K., the Netherlands, China and other countries. ZF Steering was a huge German investment of $100 million and 370 new jobs in auto parts manufacturing."
Davidson County Economic Development Commission
ometimes it pays to think small in order to hit it big. That's exactly the strategy employed by Steve Googe, executive director of the Davidson County Economic Development Commission in the thriving micropolitan area of Lexington-Thomasville, N.C.
"We continue to see small to medium-sized companies come to us — from $2 million to $12 million in capital investment," says Googe. "We feel that smaller projects are our insurance against mass exodus like we saw in previous decades with furniture and textiles."
Thinking small added up to a big payday in Davidson County, which attracted $400 million in capital investment and 1,933 new jobs last year.
"We know that most of our growth in the future will come from these smaller companies," adds Googe. "They may have 10 employees here now, but they may have 100 or more some day."
Richard Childress Racing is a case in point. When Childress moved his racing team operation to Davidson County 20 years ago, he had only 20 employees. He has more than 500 today.
Davidson succeeds because "our elected officials are very committed to developing jobs in our community for our citizens," Googe says. "We changed our thought process to focus on a lot of smaller companies, and this has worked really well. We are getting ready to announce another four projects in the next 30 to 45 days."
Named the Top Micropolitan of the Year in the March 2011 issue of Site Selection, Davidson County garnered 26 corporate facility investments last year. "We have a work force that clearly understands manufacturing and clearly has a manufacturing mentality," notes Googe. "A lot of communities are not blessed with that type of work force."
Economic Futures Group
Spartanburg Area Chamber of Commerce
nother smaller metropolitan area organization making waves in economic development is the Economic Futures Group of the Spartanburg Area Chamber of Commerce in Spartanburg, S.C.
In 2010, the group landed $1.2 billion in capital investment and 3,841 new jobs for residents of the Greenville-Spartanburg area.
"We had some expansions that are extremely good for our community," says Carter Smith, executive vice president of the Economic Futures Group. "BMW, Cooper Standard and Fairway Outdoor Advertising all had major announcements here last year."
Available buildings helped seal the deal for many local projects in 2010, Smith says. "Having the available buildings helps companies meet timelines," he notes. "It helps the company's bottom line. Also, from a logistics point of view, we have access to many markets through the Port of Charleston."
Big-ticket investments dominated the community's headlines last year, led by BMW's $750-million automotive assembly plant expansion that creates 600 new jobs for Spartanburg County. Cooper Standard Automotive selected Spartanburg over locations in North Carolina and Tennessee for an $8.3-million expansion that creates 67 jobs.
Smith notes that about 100 international companies representing 16 countries now maintain operations in Spartanburg County. "Western Europe has always been our strong point, particularly Germany and Switzerland. Now we have companies from China and Korea doing business here, and we have one from Greece," he adds. "It started back in the 1970s when we knew we had to diversify beyond the textile industry. We had about 34 international companies locate here even before BMW came in the 1990s."
Greater Houston Partnership
o community in America attracted more capital investment in 2010 than Houston. Securing $5.2 billion in investment and 3,044 new jobs, the Greater Houston Partnership last year continued a run of economic growth that is leaving most of its competitors trailing far behind.
"Our economy was the last one into the recession and the first one out," says Jeff Moseley, president and CEO of the Greater Houston Partnership. "We have already recovered one-half of the jobs lost. Within 15 months, we should fully recover all of our job losses from the recession."
Houston is also a big reason why Texas won Site Selection's Governor's Cup award in March as the state with the most corporate facility projects in 2010. Houston accounts for more than $450 billion of the state's $1.3-trillion-a-year economy. The Houston region's 152 projects last year were second only to Chicago's 184.
"We have highly trained workers at NASA and other locations," Moseley says. "More opportunities are coming out of the Port of Houston. In 36 months, Panama will open its super-container cargo lane. Houston will begin assuming its responsible role as the main port for continental Middle America."
The GHP works closely with 36 economic development organizations in the area, notes Moseley. "We have one of the largest teams of certified economic development professionals in the country."
In addition to the usual array of large chemical, natural gas and oil refining projects, the Houston region last year saw significant investments from Sysco Corp., which created 2,000 jobs; Cummins MerCruiser Diesel, which created 63 jobs; and Jyoti Structures, which created 157 jobs.
In fact, "2010 was the best job creation and retention year in GHP's 22-year history," writes Kim Baker, director of marketing and media relations for GHP. Those 18 projects retained 23,858 jobs and generated over $564 million in capital investment, she said.
diversity of economic activity has long been the hallmark of Indianapolis. Last year was no exception to the rule, as the Indy Partnership tallied $1.4 billion in capital investment and 9,500 jobs through a wide range of projects.
Dow AgroSciences announced a $340-million headquarters expansion in Indianapolis; EnerDel announced a $237-million electric automotive battery plant in Greenfield; and AIT Laboratories announced a $74-million R&D and headquarters project in Indianapolis.
Scott Fulford, executive director of the Indy Partnership, says, "There is a lack of dependency on any one type of industry here. We are seeing lots of activity in life sciences, information technology, business services, manufacturing and the energy sector."
Though not immune to the manufacturing slowdown in the Midwest, Fulford notes that "we have weathered the storms better than most places. It seems like every project is driven by our work force. We have a work force of 1.2 million people, and it is very competitive in both skills and costs."
Indianapolis regularly competes against other Top Groups destinations such as Cincinnati, Chicago and Detroit for projects, says Fulford. "Being able to identify the available work force for the employer is really the key for sealing the deal for Indianapolis," he adds. "After that, you are talking about business costs, and we have reasonable business costs in Indiana. Taxes are very reasonable here too, especially when you compare us to other locations in the Midwest."
The educational assets of Central Indiana help too, he notes. "Our educational system is second to none. Butler University, which played for the national collegiate basketball championship the last two years in a row, is located in the heart of Indianapolis. We have other colleges and universities here too, and they all support the needs of area businesses."
Southwest Louisiana Economic Development Alliance
Lake Charles, La.
he five-parish region anchored by Lake Charles in the southwestern corner of Louisiana may have less than 200,000 people, but the area packs a lot of punch when it comes to economic impact.
With $1.5 billion in capital investment and 838 new jobs created in 2010, the region outperformed every other comparably sized metropolitan area in project activity.
George Swift, president and CEO of the Southwest Louisiana Economic Development Alliance, credits the area's innovative work-force training programs. "Historically, we have had a very solid work force in the petrochemical industry," he says. "It is a very loyal and productive work force. As new opportunities come our way, we work very closely with the technical schools, community colleges, universities and high schools in the region to recruit and train the work force needed by industry."
Huge investments came to the Lake Charles area last year from companies such as Westlake Styrene, Sasol Ltd., PL Olefins and IFG Port Holdings. The area's considerable transportation and logistics infrastructure served as a magnet for these and many other firms. The Port of Lake Charles and Chennault International Airport landed several of the expansion projects.
Not even the year's biggest news story — the BP oil spill in the Gulf of Mexico — could slow down economic activity in the region. "Our region was not as directly affected as was Southeast Louisiana," notes Swift. "It did impact our fishing industry and our seafood restaurants, but we don't have a lot of damage claims in our region. In fact, we got BP to take over the former Verenium bio-fuels project, and now BP is conducting research that may lead to the establishment of an alternative fuels plant in our area."
A late April referendum may bring even more growth to Lake Charles, Swift says, with voters considering approval of another large casino project in the area.
Wayne County Economic Development Growth Engine
vercoming perceptions about Detroit is our biggest challenge," says Turkia Awada Mullin, chief development officer for the Wayne County Economic Development Growth Engine in Michigan. "All we ask is an opportunity to give a company a chance."
In 2010, Wayne County EDGE did more than give companies a chance. It landed $2 billion in capital investment and a nation-leading 16,103 jobs.
Even two members of the Big Three automakers got in on the act. General Motors announced a $145-million manufacturing plant expansion in Lake Orion, while Ford Motor Co. announced a $50-million expansion of its factory in Wayne.
"People are resilient in Detroit," says Mullin. "We graduate double the amount of bachelor's degrees of anyplace else in the country. Our talent base is why so many companies want to locate here. A good example is Ford. Ford has the capacity to go anywhere in the world for its electrification plant. They chose Wayne County. They chose us because they know we will deliver. The same is true for General Electric. They have been nothing but satisfied with us."
Mullin notes that more than 70 percent of the firms that expanded did so without the help of government incentives. "Our goal is to create an environment that breeds confidence, and we believe we are doing just that," she says. "The governor of Michigan is aiming for simplicity in how we treat private industry, and that is what business leaders want."
The work is paying off. Three years ago, Detroit ranked 147th in economic activity among the world's largest metropolitan areas, according to the Brookings Institute and the London School of Economics. Last year, Detroit moved up 100 spots to 47th.
World Business Chicago
Rita Athas, president of World Business Chicago, knows where the future lifeblood of her city's economic heart will come from — young talent.
ccording to a study done by CEOs for Cities, Chicago's 25-to-34-year-old college-educated work force grew by 33 percent from 2005 to 2009. That work force was a big reason why Groupon became America's fastest-growing employer in 2010 and why Chicago led all large U.S. metropolitan areas with 184 corporate facility deals last year.
Those projects accounted for $2.3 billion in capital investment and the creation of 4,455 jobs in the Chicago metro area.
"We put together a booklet called 'Make Your Mark: Ten Reasons Recent Grads Choose Chicago,' " says Athas. "Access to top employers like Google, Groupon, Orbitz, Boeing, Deloitte, Microsoft and many others is just one reason."
The region also spends a lot of money each year on training mid-career workers who are ready for a job change, notes Athas. "The city has put aside a significant amount of money for training these people. We work with businesses to find out the skills they need in their work force. People go through these six-month training programs and then it is phenomenal the way they get hired right out of the program."
The metro area landed large investments last year from U.S. Steel, Blue Cross Blue Shield of Illinois, Fair Oaks Farms, Astellas Pharma, Navistar International Corp. and many other firms.
"We are starting to see the economy really turn quicker than it had been," Athas says. "It now seems to be accelerating, and Chicago is ready to take advantage of that."