“SECRET SAUCE” AND OTHER KEY INGREDIENTS IN SUCCESSFUL ECONOMIC DEVELOPMENT
Three economic developers. Three small rural communities. A constellation of industrial investment well north of $2 billion in projects announced within a brief span of time—in one case, over one billion dollars in a single year.
Overnight success? A closer look shows these blockbuster successes were years in the making.
The three developers—Benjy Thompson, CEO of the Development Authority of Bulloch County, Georgia; Matthew Harrison, Executive Director of the Grenada, Mississippi Economic Development District; and Justyn Dixon, President of the North Louisiana Economic Partnership (NLEP)—recently shared insights as to how they landed their projects, what they’ve learned along the way, and how they might advise other developers striving to recruit industry and land their own investment projects.
Be relentless. Be prepared. Be patient.
For Dixon and his NLEP team, being relentless paid off when Schlumberger Limited signed a seven-year lease on the one-million square foot former GM facility in Shreveport that had been partially vacant for nearly 12 years. That project, which will create over 1,300 direct and indirect jobs, was one of several inked in the past year, the result of what Dixon calls “relentless pursuit” which began with the creation of the right mindset on the part of community officials and stakeholders. “There must a culture of relentless pursuit in place,” Dixon notes.
For Harrison, pursuit is important, but so too is relentless preparation, especially in the earliest stages. “That first meeting closes the deal,” he says. “You have to be prepared, you have to be knowledgeable, and you have to go above and beyond in answering questions.” Harrison’s preparation paid off for Grenada with two major new projects that included a Milwaukee Tool facility as well as 11 expansions of existing industry, for a total of more than 3,000 committed jobs and over $800 million in investment—all in barely more than three years.
Preparation requires knowing the community inside and out and knowing how the community fits the prospect’s needs. “An economic developer needs to know everything about his or her community as it relates to economic development,” Harrison says, although he points out it doesn’t necessarily mean being an expert on everything, but rather knowing enough to answer questions on the fly in the initial meeting.
Harrison enumerates five critical steps for that meeting: Be clear; be correct, which means listen before you speak; be concise, which means editing your story to fit the prospect’s needs; be convincing, not conniving. “Always be factual. Don’t embellish,” he warns. “It’s important to build trust.” The final step is calling the prospect to action. “We always ask, ‘What do we need to do to make this happen today?’”
Thompson, on the other hand, points to good decisions made in Bulloch County about issues such as collaboration with other counties and site preparation that must be made long before the prospect ever appears on the horizon. “We made sure we had an outstanding site ready to move,” he says. The decision proved prescient when Hyundai located its Meta Plant in adjacent Bryan County. In the span of less than a year, Thompson landed four different projects, three of which were related to the Meta Plant, together representing an investment of just over a billion dollars.
However, having a ready site also brings its own challenges, as community members may be anxious for a fast deal. “We had to be patient,” Thompson says. Over the roughly eight years the property was on the market, “we had good traffic and good interest, but the potential projects never matched the value of the site.” When the Meta Plant came into play, that patience was rewarded handsomely.
Go it alone. Go it with a group.
“Research your community and make your own pipeline,” Harrison advises. “And then contact companies directly, going as high in the C-suite as possible, and then be direct with that person. A lot of other developers are surprised by that. But when you’re getting referrals from third parties, you’re always in competition with others.”
Dixon concurs. “It’s important that you feed your investment funnel from as many sources as possible. You can’t rely only on third parties.”
For Thompson and Bulloch County, collaboration was the key to success. When Bulloch and three adjacent counties came together in a regional alliance it proved to be a deciding factor for Hyundai, and that decision in turn brought immediate results for Bulloch.
“The very next day after the Hyundai announcement, my phone started ringing with calls from interested suppliers,” Thompson says.
Move slowly. Move fast.
Planning is critical, but as a hard charger who had to adjust to a slower pace in Grenada, Harrison learned that the planning process must be sensitive to the culture. “Every community is different and that means every planning methodology must be different,” he says.
Also, rural communities, paradoxically, need more people to “buy in,” and as Harrison notes, there are many “What if?” questions. “You need to build trust, so that you can say ‘I will NOT bring you a bad project’ and they will trust you.”
However, when it comes to closing the deal, moving fast is just as critical. Harrison believes that immediate access to funds made the difference for Grenada deals.
“We got all our banks together, we had the numbers for them, and we were able to make a plan so that we could give an immediate answer about funding,” he said. “We didn’t have to wait.” He points out that while the monies may never actually be used, “you can leverage those funds to say ‘yes’ to a deal in a very short span of time. That has been our ‘secret sauce."
Of course, knowing the necessary ROI means being ready to pass on a project that doesn’t fit. Like Thompson, Harrison believes communities must be ready to pass on some projects, “You can’t be desperate to ‘win.’”
You’ve landed the big fish. Now what?
Harrison points to housing as the immediate need for Grenada, both long-term for new resident employees and short-term for construction workers and company teams; this has required working with hotels on expansions, renovations and new construction as well as with real estate developers.
“If you don’t have houses, you’re basically building other towns, and losing out on tax base and revenue,” Harrison explains. “Those new workers have to live somewhere.”
Making sure restaurants can handle new flow is also important, and Grenada is welcoming incoming industry and residents with a newcomer’s guide packed with pertinent information—a guide that’s also become useful for existing industry as an onboarding tool.
For Bulloch County, workforce development is crucial, not only for new industry but also for existing industry as employers may be anxious about the impact of the new demand for workers. Another important task is helping the community understand the change process, Thompson notes. “We’re still a rural community,” he says, “but we are evolving into a different type of rural community.”
Dixon is prioritizing expanded opportunity, leveraging NLEP’s new projects to show other potential investors that “we can deliver.” That also includes marketing to the community and to the political class. “You want to let them know ‘you believed in us, and now let’s go out and get more success,’” he says. “The pull through is as important as the push through.”
A Few Final Tips
A few general rules from these successful developers could include:
Believe in yourself. Making decisions against a chorus of advice, and sometimes loud naysayers, requires stamina and fortitude. “In this business, good enough isn’t good enough,” Dixon says. “If you’ve got a three to five percent success rate, you are hall of fame. That can be surprising.”
Build relationships not only with potential investors and with your community in order to build trust, but also with other professionals in the industry. Being an economic developer can be a lonely job, and as Dixon points out, “There may come a time when you need to pick up the phone for advice.”
Be creative. Harrison says, “At our office, we don’t say ‘no.’ We say ‘no but’ or ‘here’s how we get to yes.’ This business is full of roadblocks and you have to be creative in figuring out how to get there.”
Believe in what you’re doing. It’s easy to get discouraged when your community is an also-ran for a big project, but Dixon points out, “We are changing lives in the community, and if that’s not enough to get you off the mat, I don’t know what will.”
Celebrate your successes. After you’ve landed a project, it’s important to market your success, but Thompson also advises, “Take a breath and take a moment to celebrate.”