Why isn’t Wichita winning projects?

01/22/2012 5:00 AM

01/22/2012 7:18 AM

Boeing’s leaving. The top executives at Coleman are already gone. Wichita wasn’t even in the running for the Siemens plant in Hutchinson or the Mars plant in Topeka.

It’s time for a little self-examination to see why Wichita is losing some of the economic development battles it could be winning, say key local economic development leaders

Their early conclusion: Wichita has gotten more competitive since the last recession, but it still lacks some crucial pieces – and acquiring them will be costly and politically challenging, they acknowledge.

One likely piece is a large, well-developed industrial park where land or buildings can be given away to the right prospect. Another is a sizable pot of money for closing deals. A third is an extensive and expensive promotions budget. A fourth is to finally get serious about building ties with the rest of south-central Kansas.

This isn’t news, they acknowledge. The missing pieces have been obvious for years, but haven’t materialized for one reason or another.

But the Boeing news may cause them to act. It will certainly be talked about when, in the next 60 days, the Wichita Metro Chamber of Commerce goes out to the community’s business owners and CEOs to find out how willing they are to recommit to funding the community’s economic development agency, the Greater Wichita Economic Development Coalition.

The coalition is based out of the Chamber of Commerce, and is partly funded by businesses and partly by local government.

Last week key members of the GWEDC – coalition chairman Paul Allen, chamber board chairman Lynn Nichols, chamber president Gary Plummer, Sedgwick County Commissioner Dave Unruh and Mayor Carl Brewer – gathered to pose some critical questions.

Growth in the Wichita economy, they said, really depends on how much Wichitans want it to grow.

“Are we willing as a community to step up and compete?” Allen said. “And at what level?”

What’s wrong

Two site consultants familiar with Wichita said the leaders are largely on target with their self-examination.

Both were in Wichita in December as part of a tour given by the GWEDC to show off Wichita.

There’s a lot to like, they said. They were wowed by the quality of the skilled workforce, appreciated the central location, lauded the state’s incentives program and local economic development public/private partnerships. They even liked downtown.

“There’s a charm factor,” said Jay Garner of Garner Economics of Atlanta. “Your downtown shows very well. That’s important.”

But they were shown relatively few large shovel-ready sites and few modern office and industrial buildings, they said. Companies seeking to relocate need sites ready now, they said.

And they said a dedicated funding stream to close deals is absolutely essential. Texas allows its cities to raise the sales tax to create incentives, as well as having a whole host of powerful state incentives.

Oklahoma City has $75 million available, said GWEDC officials. Topeka has an $8 million war chest because of a dedicated sales tax.

“If Topeka can do it, Wichita can do it,” Garner said.

Garner added that the turnover of GWEDC presidents – the chamber is seeking its fifth since 2004 – is a red flag to site consultants. Companies hate surprises and political infighting during the site selection process, he said.

Dennis Donovan of New Jersey-based Wadley Donovan Gutshaw Consulting also noted that Wichita could be competitive for more than just aircraft, food processing and alternative energy sectors

But Wichita hasn’t got its name out. He recommended a large and sustained marketing/ advertising campaign, which said would cost at least $1 million a year for three years.

“Wichita has a lot of advantages, but right now it isn’t on the radar beyond a few sectors,” he said.

Challenges

But the group that gathered last week hesitated to talk about firm proposals, just yet. These issues are sensitive, and they want to gauge the appetite for change.

In the past, some local businesses involved in real estate fought city and county efforts to create a publicly-owned industrial park, saying it would compete unfairly with private parks. After years of dithering, Sedgwick County recently decided to build new roads and infrastructure around an 804-acre site owned by the city of Bel Aire, which hopes to attract large alternative energy or composites manufacturing plants.

And those in the group know that raising taxes or finding some other income stream to fund economic development efforts will cause a fight.

That’s why they feel the need for a lengthy education and awareness campaign. They think that most citizens want them to bring more jobs in and don’t put their faith in low taxes alone to build the economy.

“You hear a lot from the loud minority,” said Mayor Carl Brewer. “If you talk to the average citizen, they think it’s our responsibility to do whatever is necessary to bring new businesses and new jobs here.”

Michael O’Donnell, who got elected to the Wichita City Council as an opponent of public involvement in most development, disagreed.

He respects the GWEDC and its mission, he said, but comes down strongly against raising any kind of taxes to create incentives. Low taxes should be Wichita’s main economic development tool, O’Donnell said.

“I don’t believe higher taxes is the pathway to success; it’s the biggest obstacle,” he said. “If it’s important to fund something, we need to find other projects to defund.”

Their case

Last week Nichols recounted an often told, but still threatening, story.

As the owner of Yingling Aviation, he said, he gets calls regularly from economic development officials trying to lure him to other states. He listens to gauge the competition.

They’ve researched the industry, Nichols said, and know aircraft is a growth industry with high paying jobs. Their offers are seductive: free land, free or low-cost buildings built to suit, a workforce trained for free.

“Oh, and this is the one I like the best,” he said. “They’ll say: ‘And we have cash.’ ”

If his 130-employee business attracts that many calls, Cessna Aircraft and Spirit AeroSystems must get twice as many or more from all over the world.

The threat can be subtle, Nichols said. Cessna, for instance, recently announced two new models and those out-of-state economic developers have been calling.

“If they are able to put together a large enough incentive package in front of Cessna to get them to build just one aircraft, a jet, in their community, that means that the workforce will be there, the structures will be there, the commitment to the community will be there,” he said.

The next time Cessna adds a new jet, it might go to the new factory out of state, Nichols said.

Wichita won’t dry up and blow away, they say. But its future gets a little poorer each time a new product line leaves or the search for a new factory site skips over Wichita.

“What will we look like in 10 years?” Nichols asked. “Will we be a community that goes, ‘Wow, where did our aviation industry go?’

“Could we be a city that dies of a thousand cuts?”

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