EDC taking closer look at business recruitment incentives
WILLMAR -- When a ribbon-cutting ceremony was held recently to celebrate the opening of a new office for the tech company Genesis10, officials with the Kandiyohi County and City of Willmar Economic Development Commission would liked to have been the hosts.
But they weren't, because Genesis10 picked Eau Claire, Wis., for its new facility instead.
What could the Economic Development Commission have done differently?
Some additional business incentives might be needed if Willmar and Kandiyohi County are to strengthen their competitiveness among the Midwest's smaller-market cities, said Steve Renquist, director of the EDC.
"More tools in the tool kit" is how he put it in a discussion last week with the Economic Development Commission's joint operations board.
Willmar and the MinnWest Technology Campus were among the contenders when Genesis10, which provides business and technology services, went looking for a city in which to expand. Duluth also was on the list, as well as several other cities in the Midwest and in the South.
Eau Claire rose to the top, however, for several reasons. One draw, according to the Eau Claire Leader-Telegram, was the proximity of the University of Wisconsin at Eau Claire. The city also offered ready-to-go office space and provided a $50,000 loan that will be forgivable if Genesis10 can create at least 50 jobs in the next four years. Wages average $30 an hour for positions such as business analysts, software developers and systems administrators.
Renquist said he feels good that Kandiyohi County was even in the running.
"The fact that we're involved in this thought process for them is pretty impressive," he said.
But the EDC also needs to look at what might make it become more competitive, and what types of inducements help successfully land a new business, he said. "When we understand that better, we understand what economic development is doing better."
To start with, the EDC's finance committee is putting together a spreadsheet to take a look at the financial incentives, such as tax abatements and low-interest loans that neighboring states, cities and counties are offering.
"Our interest at this point is in doing some comparing," said Jean Spaulding, assistant director of the Economic Development Commission.
A more in-depth discussion also will take place when the EDC holds its annual planning session in November.
It likely will include some debate about what a public entity can -- or should -- provide as a business recruitment tool. Should the EDC offer forgivable loans, for instance, or other types of subsidies?
"We need to have this philosophical discussion with our county board and with the city of Willmar," said operations board member Ron Erpelding.
Renquist said there's a private-sector effort under way to start a local venture capital company for ag-related and renewable energy start-ups.
This might be a strategy that could be used for other types of businesses as well, he said. "We really would be well served if we could have a venture capital organization."