Economic developers focus more on growing rural communities in West Michigan

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As Michigan industries have evolved over the years, as have the roles played by economic developers in helping businesses grow and develop in communities across the state.

While economic developers still focus their efforts on retaining existing businesses, courtesy of site selectors for business expansion projects and overseas travel to gain foreign investment, they have also broadened the scope of their services to work in smaller rural areas of western Michigan.

Concrete example : Southwest Michigan First Corp., a Kalamazoo-based economic development company, signed a nearly two-year contract with the city of Marshall last month. Under the terms of the agreement, Southwest Michigan First provided a host of services that were not typical for the economic development agency.

The partnership, which officially began in October 2014, has placed Southwest Michigan First at the head of a consolidation effort to combine the Local Development Finance Authority (LDFA), chamber of commerce, convention bureau and visitors and the city center development authority under the banner of the existing Marshall Region Economic Development Alliance (MAEDA).

“We wanted to support them because we believe stand-alone systems are no longer sustainable,” said Ron Kitchens, president and CEO of Southwest Michigan First. “There aren’t the resources to have five different leaders, five organizations, five different IT systems – five different things. ”

Beyond the onboarding process of combining these organizations, Southwest Michigan First agreed to staff the Marshall Visitor Center and administer its day-to-day programming. The economic development firm has also worked with community stakeholders on projects ranging from installing streetscapes and signage and painting doors to organizing promotional retail outings and organizing. of a community calendar, he said.

“It was much more important than a (typical) economic development contract,” Kitchens said. “It was really a complete start-up of all these entities and the merging of their boards of directors and the management of these other businesses. … It was a big deal. ”

When the contract ended on March 1, Southwest Michigan First transferred all operations to MAEDA, which recently hired Scott Fleming as CEO to lead the newly restructured organization.

Southwest Michigan First’s partnership with Marshall points to a broader trend for agencies to increasingly focus on more rural areas as part of a regional economic development service delivery model, sources said.

In 2011, under the leadership of Governor Rick Snyder, the Michigan Economic Development Corporation (MEDC) announced a change in Michigan economic development policy to focus on a regional service delivery model, rather than a single statewide strategy.

Some metropolitan economic development organizations had previously collaborated with rural colleagues – for example, the Grand Rapids-based organization The good place inc. contracted for years to provide services to Newaygo County Economic Development Office – but the change in state policy has largely caused their attention to be shifted to rural areas.

ADDING RESOURCES

Beyond the change in the state’s economic development policy, demographic shifts also serve as a driver in how agencies focus their efforts, according to industry sources. As more people, especially millennials, move to large urban areas, companies are taking the same steps to better attract the talent they need to grow, said Dean Whittaker, president and founder of Whittaker Partners Inc., an economic development consultancy based in the Netherlands.

“I call it ‘bright lights and big cities’ syndrome,” said Whittaker. “It’s the attraction of talent from these non-urban areas because young people are moving to urban areas. Unless you have a mass of resources to work with, you won’t have the critical mass to attract these projects.

The need for more resources drove the Greenville Chamber of Commerce contract with The Right Place to provide business attraction and retention services in the Montcalm County community of approximately 8,400 people located 35 miles northeast of Grand Rapids.

In September 2014, the partnership achieved a major victory when The Right Place helped attract the Chinese wheel maker. Citic Dicastal Co. Ltd. to the old United Solar Ovonic LLC Greenville campus. Construction on the plant is still underway, where the auto supplier predicts it will create 300 jobs by 2018.

The Right Place has similar partnerships with economic development agencies in Montcalm, Ionia and Newaygo counties.

“One of the cool things we’ve identified is helping rural groups understand that they’re part of a bigger region,” said Therese Thill, vice president of business development at The Right Place. “It’s everything from attraction to retention, and one of the great benefits The Right Place can bring to these rural communities are the resources of the area. “

Likewise, Southwest Michigan First maintains contracts with St. Joseph County and operates offices in Three Rivers and Sturgis, Kitchens said.

“If you look at our state, it’s easy to focus on the urban (areas),” he said. “It’s really important, but if we don’t focus on rural areas as well, we’re missing the boat and just not serving all the people who need to be served. “

SELL AT COT

In some cases, the shift to a more regional economic development model has been met with skepticism.

In Marshall, local groups criticized the two-year, $ 950,000 contract with Southwest Michigan First when the deal was first announced in September 2014. The contract included $ 250,000 in “in-kind contributions” to cover the lease and other expenses associated with the upkeep of the Marshall Visitor. center.

By comparison, The Right Place charges between $ 125,000 and $ 135,000 per year for its partnership with rural communities.

Kitchens at Southwest Michigan First noted the disparity between the contract with Marshall and the typical cost of economic development services resulting from additional programs provided to the community, including running the town’s visitor’s office.

“We reviewed the budget with them – it was a collaborative effort,” Kitchens said. “It was open book management, and they saw what the costs were and it was less than what they were spending when we arrived.”

Even by contracting with Southwest Michigan First, the city was able to reduce its expenses by 10% from what it paid when it operated the five organizations before the restructuring, Kitchens said.

Although Whittaker is not aware of the specific contract between Southwest Michigan First and the city of Marshall, the consultant said rural communities must spend on economic development services if they are to survive.

“I am impressed that they are investing so much in their community,” he said. “Marshall alone can’t make enough noise to be found. How can you make yourself known in this immense basin of economic development? How do you make enough noise to get noticed?

A BIGGER TOOLKIT

Industry sources have said that the best approach to rural economic development in a diverse state like Michigan is to leverage a “big toolbox” of capabilities and expertise. Economic developers working in rural areas should be prepared to offer services such as place creation and community planning that are generally outside their purview in large metropolitan areas, they said.

While it may not be in the organization’s repertoire to paint doors and host community events, Southwest Michigan First’s services in Marshall reflected the scope of economic development in a rural community, according to Kitchens. .

“This is what rural community development looks like,” he said. “But to do these things well, you have to really be deeply rooted in (the community). In the long run, we wouldn’t be a good solution – it has to be local. “

Thill agreed that a successful rural economic development strategy requires agencies to build relationships with key community members. The Right Place often interfaces with local politicians, chambers of commerce, board members and other stakeholders, she said.

“I think even more important than with urban economic development, it is essential to identify the key strategic actors able to help identify the problems and move forward,” said Thill. “They are so engaged and excited to see the growth in the region. They are very respected individuals themselves, and then they come in with The Right Place economic development map behind them, and that has really allowed us to be very effective.


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