County Board to consider implementing economic development district
By Stuart R. Wahlin
Staff Writer
The Winnebago County Board will vote March 25 whether to support the establishment of a bi-county economic development district (EDD) with Boone County.
By establishing the EDD with an already-completed five-year comprehensive economic development strategy (CEDS), the two-county region would be eligible for federal grants through the Economic Development Administration (EDA), a division of the U.S. Department of Commerce focusing on job creation and retention, especially in areas of economic distress.
According to Genevieve Borich, director of research and planning for the Rockford Area Economic Development Council (RAEDC), “The economic development district is much like RMAP [Rockford Metropolitan Agency for Planning], and the idea is to implement this MAP in this plan.”
RMAP Executive Director Steve Ernst indicated the planning agency’s scope is essentially limited to transportation issues, but he believes the EDD and RMAP will compliment one another.
“It is highly likely that future federal programs will require infrastructure projects, especially transportation, to demonstrate a return on investment,” he noted.
“At a policy level, the main difference between RMAP and the EDD is that the law requires 100-percent public officials on the MPO Board for RMAP and requires 51 percent or more private agencies on the EDD Board.”
During the 1980s, he noted, “The role of ‘lead agency’ for economic planning was carried on by the Rockford Chamber of Commerce and the Council of 100, although a formal EDD was not continued forward.”
In recent years, he added, RMAP and RAEDC have developed a “cooperative exchange of information” to move the region forward.
“The recently completed CEDS document for Boone and Winnebago counties is a good example of the RMAP-RAEDC-Growth Dimensions cooperative alliance,” he asserted.
Borich said the potential benefits of the EDD are expansion of the region’s economic capabilities by helping to align its goals and priorities, creating a single point of contact for the EDA, offering technical assistance, such as research for loans and grants, grant writing and administration. EDD staff would also track economic development data and opportunities while being charged with implementation of the CEDS.
The CEDS document is available online at http://www.rockfordil.com/files/CEDSfinal.pdf.
The RAEDC is asking the County Board to give its nod of approval to the CEDS and creation of the EDD, along with an annual financial commitment to the five-year strategy.
The Boone County Board has already voted in favor of the plan. Under the partnership, Boone County’s annual share of the local match would be $8,625, and Winnebago County’s would be $48,375. The EDA would match the $57,000 local contribution, giving the EDD a $114,000 annual operating budget.
The counties’ financial commitments are determined on a per capita basis of 16 cents per person.
According to County Board Chairman Scott Christiansen (R), Winnebago County’s contribution would be earmarked from landfill tipping fees. The county typically funds the RAEDC $100,000 annually from the same host fee.
Because the RAEDC is funded for the purpose of economic development, The Rock River Times asked why the $48,375 wasn’t coming from its own nearly $2 million budget for such efforts.
Borich explained that although the RAEDC would be a part of the EDD, it will not oversee its operation.
“The board of the EDD will determine the work of the staff of the EDD—work that is above, beyond, and separate from what we do at the RAEDC,” she responded.
RAEDC Board Chairman Bill Roop, also president of Alpine Bank, is encouraging the County Board to support the plan.
“For the amount of money it takes to put this organization in place, as a financial expert, I can say this makes good dollar sense,” Roop asserted, noting the local match of $57,000 brings an average of $3 million in grants annually to similar-sized EDDs. “That multiplies this investment nearly 90 times over through investments in our roads, bridges, people and marketing. In terms of a business plan, this is solid.”
Last onboard, but moving to top of list
RAEDC President Janyce Fadden said the Winnebago-Boone metropolitan statistical area is the last large urban region in the state to pursue such a partnership with the EDA by establishing an EDD.
“We, as a region, have not been working with the EDA, and this project is to get us active with the EDA, get us eligible for grant matching dollars from the EDA,” she explained. “The EDA is about job creation, so it’s a very interesting time for us to be looking at this with our level of unemployment.
“It is a competitive process to compete for EDA funds, but distressed regions…get higher priority,” Fadden added. “We are one of the highest distressed, and they want to help us.”
The metropolitan area’s unemployment rate as of December was 16 percent, compared to a 9.7 percent unemployment rate nationally. In addition, the RAEDC reports the area’s per capita income of 79 percent of the national average, combined with a high poverty rate, would earn the EDD priority for federal dollars, especially when the region works as one for the grants.
According to Borich, 26 of the region’s top 500 companies have closed their doors since 2007, directly resulting in 4,400 job losses. In total, Borich said, 17,000 net jobs have been shed in the region since 2008.
Projects eligible for EDA grants include public infrastructure projects and workforce programs necessary to lure or retain high-paying employers. Regional planning and marketing efforts aimed at long-term economic well-being are also eligible for federal aid.
Fadden reported being approached about a year ago regarding the creation of a team to work with the EDA to counter the challenges of the economic crisis. A bi-county strategy committee was formed by members of the RAEDC and its Boone County counterpart, Growth Dimensions. Such a team is required by the federal government to develop the CEDS plan.
C. Mark Williams, executive director of Growth Dimensions for Belvidere and Boone County, is encouraging Winnebago County Board members to join the Boone County Board in supporting the CEDS and creation of the EDD.
“This can take a turn for the best if we plan, act and compete as a region,” Williams stressed.
CEDS Strategy Committee Chairman Richard Van Evera, also Growth Dimensions Board chairman, concurred.
“We cannot afford to ignore opportunities like this and what it can bring to our region,” he argued. “I can tell you we had a lot of early morning meetings, but more than ever before, I believe a regional approach is the key to pulling us out of this crisis. … I fully believe this plan and the establishment of an economic development district organization is crucial to the possibility of our sound economic future.”
Developing the CEDS
By federal requirement, at least 53 percent of the 35-member Strategy Committee must represent for-profit organizations, with the remainder being represented by non-profit or public agencies.
“The key to this is that they want to see that there is private sector representation involved in developing this plan,” Borich explained.
The group reviewed the region’s existing economic development plans, conducted business surveys, evaluated transportation and utility systems, as well as natural resources. As part of the project, Northern Illinois University provided an analysis of the local economy to identify targeted industries, local, regional and national initiatives, incentives, and to determine economic development priorities for the region.
As a result, the committee developed six goals, including creation of the CEDS plan with a marketing strategy emphasizing bi-county cooperation, nurturing efficient, diverse business development and job growth, ensuring the availability of a skilled and flexible workforce able to meet the demands of new and existing industries, meeting transportation, utility and communication infrastructure needs, reuse of underutilized commercial and industrial properties while protecting natural resources, and increasing the quality of life in the region by emphasizing a community identity based on its unique resources.
The committee worked with economic development staff from various municipalities to identify potential economic development opportunities in the next five years for which the municipalities may be grant-eligible.
Minority representation?
When County Board member George Anne Duckett (D-12) inquired as to how much minority representation there was on the Strategy Committee, Fadden responded, “We had several female-owned business owners.”
Duckett then asked, “What about blacks, minorities, people of color?”
Fadden said she would have to get back to Duckett, because she did not have the list of participants in front of her.
Duckett added: “This federal money that’s coming in here—I just don’t see minorities benefiting that much from it. I might be wrong, but I’m just so tired of seeing money come in here and…people of color just aren’t included.
“The unemployment is so high in the minority community,” Duckett continued. “We really have to focus on that, but you’ll be able to focus on it better with participation from minorities.”
Borich interjected: “We have several projects on the horizon for the next nine-month window that are addressing that specifically. We have staff in place that are working at attracting more high-paying jobs, which a lot of the EDA projects do, but we specifically developed this plan so we can look for other funding opportunities to develop programs that address the lower income and lower skill sets that are in our community area.”
Borich cited development of urban farming and workforce training programs as examples.
“We can’t just look at one end of the unemployment rate,” she said, however. “We need to look at the whole community and how to move forward together.”
Duckett retorted: “I don’t think I’m guilty of ever asking anybody to just look at one race of people. I asked you to include us. And I just want to remind you this is federal money, and so therefore, there’s some things that you have to do.”
John Ekberg (R-10), chairman of the board’s Economic Development Committee, acknowledged every board member’s constituents are wondering what the county is doing about the high unemployment rate.
“I think this is a big push that we’re doing to help align ourselves with the federal government, with grant programs which will help people of color, every person in our community,” he noted. “So, we’re certainly concerned about the distressed portions of our county, which are just about everywhere, but I’m very glad that we’re going to put our $48,000 in, and we’re gonna have, potentially, $1 [million] to $3 million in grant opportunities for the county.”
Regardless of minority representation on the Strategy Committee, L.C. Wilson (D-12) said he planned to support the creation of an EDD. Citing the region’s high unemployment and poverty rates, he asserted, “That’s a good reason to want to go with a plan like this.”
Dorothy Redd (D-6) wondered, “Will these [grant] funds benefit the people of the highest unemployment rate?”
Fadden responded, “It depends on what we apply for for grants, how the committee continues to work to put grants together that can assist those people.”
The payoff
“The Economic Development Administration is one of the smallest divisions of the federal government, and they run out of funding quite quickly,” Borich said, noting the federal government’s fiscal year begins in the fall.
However, RAEDC leaders are optimistic that an application submitted to the EDA in November will yield a $12 million entrepreneurship grant this year.
“It is for the six-county [Walworth, Racine, Rock, Winnebago, Boone and Kenosha] region dealing with the auto downturn,” Borich explained, noting the grant would help to rebuild local economies impacted by hard times in the auto industry through new startup opportunities and entrepreneurial support for existing companies.
A second application from which the EDD could benefit is a $730,000 economic adjustment grant aimed at restructuring the regional economy, creating a “seamless digital interface” for improved economic development coordination, and an implementation strategy.
A third grant the RAEDC is hopeful for, worth $10 million, is related to creating the country’s first commercial and defense aerospace “incubator facility” in the City of Rockford. During his recent State of the City address, Mayor Larry Morrissey (I) outlined his vision for a “Center for Aerospace Innovative Research” in the city-owned Ingersoll building in conjunction with RAEDC’s pending inheritance of the EIGERlab.
Grants would not be requested by the EDD itself, Fadden explained, but by individual municipalities pursuing specific projects.
“The public infrastructure projects must come from the local municipal governments,” she said, noting the Lowes Distribution Center as one project that would have been eligible for EDA assistance. “If we were qualified at that point, we could have applied to the EDA and asked them to pay 50 percent of that road. That’s the type of infrastructure project the EDA wants to work on.”
Funding sources for grants are not limited to the EDA, however.
Borich noted: “This was the first comprehensive economic development plan that our community has had in the last 30 years. And so, instead of leaving dollars out there, we want to make sure that we are leveraging as many sources as possible for economic development projects.”
In addition to the EDA, Borich said, other potential funding sources include a variety of other federal government agencies, as well as the Ford and Kellogg foundations.
“So, if a project has not happened through the first source of funding, we’re going to keep working to get the funding,” Borich asserted.
Other projects deemed vital by the group include workforce training programs in the fields of nursing, bio-fuels, renewable energy and manufacturing, expanding Boone County’s Ag-Tech Initiative into a new facility, creation of a public database related to regional sustainability and economic well-being, and attracting and retaining college graduates.
If the EDD is established, annual progress reports must be provided to the EDA to remain eligible for the program, Fadden indicated.
Board members Steve Schultz (R-2) and Paul Gorski (D-5) asked that the County Board also be briefed once per year as a means to evaluate the EDD’s performance in turning the county’s investment into tangible economic development.
Structure
The EDD would be governed by the Rockford Area Strategic Initiative (RASI), which would be set up as a 501(c)(3) non-profit. A legal charter would designate an autonomous bi-county board of directors with its own annual operating budget.
The proposed board would include representatives from the counties’ chambers of commerce and workforce investment boards, a union, the mayors of Belvidere and Rockford, chairmen of the Boone and Winnebago county boards, the director of RMAP, board chairmen from the RAEDC and Growth Dimensions, the counties’ geographic information systems, the CEDS Strategy Committee chairman, Northern Illinois University and Rock Valley College. In addition, economic development staff from various municipalities would also be represented on the board, as would at-large members from Boone and Winnebago County.
“The governing board is actually the opposite of what the CEDS Strategy Committee was, which is to be more than half public sector representation,” Borich noted.
Board members would not be compensated, but Fadden acknowledged an undetermined number of staff positions would be paid.
The group’s EDD application is expected to be finalized by the end of the first quarter, which would open the door for the $57,000 federal match. Although application reviews typically take four to eight months, the RAEDC noted newly-formed EDDs tend to move quickly through the system.
“We could begin running the EDD without the matching funds, with the funds from Boone and Winnebago counties,” Fadden noted. “That will accelerate us to receive matching funds after October, but we can begin the process quite quickly.”
The CEDS Strategy Committee Private sector
→ Richard Van Evera (chairman), partner, Barrick, Switzer, Long, Balsley & Van Evera
→ Teresa Beach-Shelow, owner, Superior Joining Technologies, Inc.
→ R. Neil Buck, RDC general manager, Lowe’s Companies, Inc.
→ Christopher T. Budde, vice president and general manager, Thermo Fisher Scientific
→ John Chadwick, vice president and general manager, WREX-TV
→ Ron Clewer, director of residential real estate development, William Charles Ltd.
→ Barbara R. Hemme, corporate secretary/controller, Youngberg Industries, Inc.
→ Brent B. Johnson, president & CEO, Ringland-Johnson, Inc.
→ Chris Kelson, president & CEO, BioVantage Fuels, LLC
→ Stuart M. Kemp, vice president, Hanson Professional Services, Inc.
→ Jeffrey D. Lee, director of operations, Thermo Fisher Scientific
→ Tim Morris, president, Hamilton Sundstrand
→ Paul Nicolosi, president & CEO, The Buckley Companies
→ Mark Peterson, general manager, CherryVale Mall/CBL & Associates Properties
→ D. Kraig Pierceson, president & CEO, Larson & Darby Group
→ Peter Provenzano, president & CEO, SupplyCore, Inc.
→ Bill Roop, president & CEO, Alpine Bank
→ Daniel Ross, chief operating officer, Williams-Manny, Inc.
→ Joel Sjostrom, president & CEO, Sjostrom & Sons, Inc.
→ Don Thayer, director of business development, Suby, VonHaden & Associates
Public and non-profit sectors
→ Belvidere Mayor Fred Brereton, RMAP Policy Committee chairman
→ Darcy Bucholz, executive director, Workforce Investment Board
→ Clinton Cole, assistant executive director, Winnebago County Housing Authority
→ William R. Dilts, vice president of campus development & government relations, Rockford Health System
→ Janet Ellis, executive director, Northwestern Illinois Area Agency on Aging
→ Stephen K. Ernst, executive director, Rockford Metropolitan Agency for Planning
→ Janyce Fadden, president, Rockford Area Economic Development Council
→ Darrin Golden, business manager, IBEW/NECA
→ Steve Graceffa, district director, Rock River Water Reclamation District
→ Daniel G. Jacobson, public works & community development director, City of Loves Park
→ Kerry Knodle, executive director and CEO, Comprehensive Community Solutions, Inc.
→ Karen Lemmons, director of community development, Village of Machesney Park
Source: RAEDC
From the March 17-23, 2010 issue
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