Economic development head visits Springfield

DED Director Greg Steinhoff outlined the key issues during a March 1 presentation in Springfield, sponsored by the Springfield Area Chamber of Commerce’s Governmental Affairs Committee.

The keys to ensuring a competitive business environment in Missouri, Steinhoff said, are to better serve the needs of community businesses and to recruit new jobs to the area.

On the service end, Steinhoff said, the state plans to better organize the way communities interact with the state DED system.

“Our goal is to have a single individual assigned to each smaller region in the state who will represent all of the DED programs and be able to deliver to those communities a base,” he said. “That way you can say, ‘here’s our plan, here’s what we’re trying to do, help us get this done.’”

Steinhoff said that the state’s biggest weakness, though, is business recruitment. He said states that have been successful in recruiting new businesses have been the ones that let state government take the lead in national recruiting efforts.

DED’s solution: hiring full-time employees, stationed in cities such as New York, Los Angeles and Chicago, to sell the benefits of Missouri to companies looking to expand or relocate.

The money for those employees would come from the Hawthorn Foundation, a 501(c)(3) group created in 1982 by then-Gov. Kit Bond to privately fund economic development.

“There are people like the chamber who have organized trips to Dallas, Chicago, China, but that (local) approach is really hit-and-miss strategy,” Steinhoff said. “Other states have realized that in order to be successful in this recruitment, you have to develop long-term relationships with the decision makers that are affiliated with these businesses.”

As an example, Steinhoff pointed to the St. Louis area, which he said hasn’t added a new business with 100 or more employees since 1998.

Greg Williams, senior vice president of economic development for the Springfield chamber, however, politely disagreed with Steinhoff’s stance.

“I would suggest that the local economic development efforts in Missouri are driven by the local communities and supported by the state of Missouri, and not the other way around,” Williams said.

“The concept of developing a more quasi-public or somewhat private-sector recruitment initiative is one that’s a long time coming, (but) we have a very well-funded, aggressive, successful local business recruitment model,” Williams added.

He cited the new T-Mobile USA call center, which will employ at least 700 when it opens in June, and the growth of the two Partnership Industrial Centers.

“The state has been quoted as saying that this region has carried Missouri’s economy for quite some time now,” Williams said. “I would say that it’s more important to continue to allow successful local communities to drive development and for the state to support that.”

TIF bill hits Missouri Senate

Another item that had attendees of the seminar concerned was Missouri Senate Bill 832, which would modify the state’s tax increment financing program.

The bill would place stricter regulations on what properties could utilize TIF programs; TIF funds could not be used for residential development of previously undeveloped or vacant land, and TIF also would not be allowed for projects located in 100-year flood plains, except in riverfront developments.

Greg Williams, head of economic development for the Springfield Area Chamber of Commerce, said that while Springfield has only used tax increment financing once – for the redevelopment of center city – he is concerned by the proposed restrictions.

“The concept is still good – TIFs and incentives for new development create tremendous back-end capital investment and sales-tax enhancement,” Williams said. “Most of the time you’re talking about undeveloped green fields – generating $30 or $40 a year in property taxes – being used to generate hundreds of thousands of dollars in property tax revenues – for school districts, for library districts – once development occurs.”

He said that the chamber supports the appropriate use of development tools like TIFs because “they are effective when they’re used properly.”

The bill was scheduled for perfection by the Senate March 2.