Archive for Thursday, October 4, 2007

Forum stresses need to retain existing businesses

October 4, 2007

"Companies that are here need to be loved," Tim Cowder, senior vice president of the Kansas City Area Development Council, told a group of around 40 or 50 at the 2007 Business Retention and Expansion Forum.

The group of elected officials, chamber of commerce representatives and local business owners gathered Wednesday, Sept. 2, at the Falcon Lakes Clubhouse in Basehor to exchange knowledge and expertise on keeping existing businesses and drawing new businesses to Leavenworth County.

Cowder, the moderator for the night, joined a panel of guests from the Topeka, St. Joseph, Mo., and Olathe Chambers of Commerce to emphasize the need to retain local businesses -- something that often gets overlooked while new companies coming in seem to make the headlines and are a bit more "sexy."

"We need to give emphasis to getting (businesses) in but, more importantly, to keeping them here," Cowder said.

Dan Schemm, with the Topeka Chamber, pointed to a statistic that, on average, 80 percent of jobs in a given community come from existing businesses in that community.

Schemm said the best tools available for business retention are good relationships and being able to listen to local businesses' concerns.

"It's the small, intangible things that are more important than monetary incentives,"

Schemm said, noting that measures to fill in potholes near a Topeka business did more for business relations than anything else.

Ron Shaver, with the Olathe Chamber of Commerce, added that another extremely important tool is having a government member intimately involved with local businesses and being aware of all local policies.

For instance, Shaver said, he must know the implications of expanding a road or must have at least a cursory understanding of tax increment financing policies, benefit districts or other monetary incentives.

Also important, are data tools such as socio-economic and school district information that can be provided, Shaver said.

"Businesses need to know what's going on around them."

He added that, in Olathe, the chamber of commerce sponsors business ambassador programs where businesspeople have a chance to talk to other businesspeople.

Shaver said, a lot of times, when CEOs are thinking about establishing in a certain community, they'll ask established business leaders in the community about upcoming trends and whether or not the municipal government in the area supports businesses.

When the floor was opened for questions, Tonganoxie City Administrator Mike Yanez asked about retaining small retailers -- or "mom and pop" type stores.

"We are a county and a small town surrounded by an 800-pound gorilla," Yanez said, asking the panel for "any suggestions as we compete with the retail giants to our east and to the west in Douglas County."

Shaver said Olathe, too, has struggled with keeping small retailers in its downtown and in The Great Mall of the Great Plains. But instead of trying to replicate what has been successful in other communities, he suggested trying to maintain the character that makes Leavenworth unique.

Mark Werthmann, economic development administrator for the city of Leavenworth, asked the panel how much in terms of incentives municipalities should provide to businesses.

Incentives like TIFs, benefit districts, forgivable loans and property tax abatements were all used by other communities mentioned in the forum.

"The most effective way to distribute incentives is to have well-stated policies to give to business prospects," Shaver said.

He noted that, while monetary incentives can encourage "big-box retailers" at the expense of smaller business owners in some cases, they ultimately create more revenue for local governments by raising the tax base.

In Leavenworth County, incentives like TIF financing for the Lansing Towne Center and a benefit district for the County Road 1 improvement project already are being used.

According to the Leavenworth County Development Corp. Web site, tax abatements in the county are generally capped at 50 percent for a maximum of 10 years.

LCDC Executive Director Steve Jack said ultimately it is up to the municipal governments to decide what types of incentives to offer.

He said economic development efforts in Leavenworth were hampered by a lack of funding, comparatively.

Jack said LCDC's limited budget comes from annual appropriations from the county and Leavenworth's cities, as well as from nearly 100 members' membership fees.

Charlie Gregor, of the Leavenworth-Lansing Chamber of Commerce, said his organization receives complete funding from membership "investments."

In communities like Shaver's Olathe, a 6 percent guest tax finances the chamber of commerce, and in Topeka, Schemm said, the chamber is funded through a quarter-cent sales tax.

Asked what's most important to keep in mind as development -- like that along County Road 1 in southern Leavenworth County, for instance -- is planned, Shaver said, "Infrastructure... a commitment to infrastructure is important to taking advantage of the resources you have in a community."

Jack said the biggest "takeaway" from the meeting was "that economic development is clearly about relationships."

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