Business investments adding up in chamber campaign

Springfield Business Development Corp.’s five-year Partnership for Prosperity II campaign is at 85 percent of its goal at its halfway point.

Despite a campaign launch in January 2008 – one month after the National Bureau of Economic Research pinpoints as the start of the recession – the Springfield Area Chamber of Commerce subsidiary’s capital campaign is at $193 million. Its five-year goal is $225 million, said Ryan Mooney, vice president of business development for the chamber.

“The economic climate has not been helpful,” said Commerce Bank President Bob Hammerschmidt, who was part of SBDC’s steering committee that helped raise $2.75 million from area businesses to encourage economic development in the area. “Being even halfway to the goal is significant.”

Partnership for Prosperity II is a concentrated effort by SBDC to recruit economic development by marketing the area to outside companies, and encouraging business retention and expansion. The first campaign, which ran 2003–07, helped bring $215 million in capital investments and 26,200 jobs to the region, according to the SBDC.

Mooney said nine businesses have made financial commitments to expand or build in the region so far in the second campaign. For a project to be counted toward the goal, Mooney said, the partnership must have been actively working toward recruiting that business.

“We need to have provided value,” he said. “It’s not just if we knew about it.”

The chamber withholds the names of companies that have requested confidentiality.

Mooney cited McLane Co. Inc., Kraft Foods Inc. and Buckhorn Inc. as examples of economic development counted in the campaign. According to Springfield Business Journal coverage, Kraft Foods Inc. made a $9 million investment commitment and expects to add 50 employees as it expands its production line to include shredded cheese and microwavable macaroni and cheese. McLane Co. Inc. is investing $30 million to build a 450,000-square foot distribution center in Republic, which is expected to add around 300 jobs. The expansion of Buckhorn Inc.’s manufacturing facility brings in another $6.5 million and about 80 jobs.

SBJ research shows other expansions announced after the campaign’s launch included FedEx Freight East Inc.’s July 2008 plans for a $11.36 million expansion and 46 new jobs and Northstar Battery’s $60 million investment and addition of 400 workers one month earlier.

The June 1 announcement of Gold Mountain Communications LLC’s $960,000 expansion, however, is one Mooney sees as especially positive.

“It’s a great example of growth as we’re coming out of the recession,” Mooney said, noting Gold Mountain President Hank Seevers started the telemarketing business after his former employer, Wyndham Vacation Resorts, closed its Springfield location. “Here’s a guy that was dealt a blow by the recession, who was able to start a company that is adding 140 jobs to the area.”

With $32 million in capital investments remaining before the capital campaign reaches its goal, the economic development work involves a balance between promoting Springfield to outside companies and working with companies already established in the area to encourage growth.

“There’s a statistic thrown around in the industry that 80 percent of new jobs come from existing companies,” Mooney said, noting that most of the companies counted within the capital campaign were expansions of businesses already in the area.

A focus on existing companies can sometimes involve what Hammerschmidt calls “guerilla tactics.”

“It takes getting out in the trenches, you can’t just do an ad campaign,” he said. “You have to talk to people and find out who those people know and develop relationships with them. If you know that a company in the area – an SRC or a Kraft – has a vendor that is a significant vendor, you might contact them and find out if they’re interested in expanding.”

Randell Wallace, attorney at Lathrop & Gage and a past president of the SBDC board, said one of the organization’s strengths is its focus on homegrown businesses.

“With any business, if you look at your community as a business – and I think you should – the first thing you have to take care of is your existing customers,” he said.[[In-content Ad]]