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Attracting Jobs: Economic Development Policies and Mega Projects Liz Povar, Director of Business Dev

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ThyssenKrupp AG in Alabama, 2007 ($3.7 billion investment; 2,700 jobs) ... Samsung in Texas, 2006 ($4 billion investment; 900 jobs) ... – PowerPoint PPT presentation

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Title: Attracting Jobs: Economic Development Policies and Mega Projects Liz Povar, Director of Business Dev


1
Attracting Jobs Economic Development Policies
and Mega ProjectsLiz Povar, Director of
Business DevelopmentRob McClintock, Director of
ResearchVirginia Economic Development
Partnership
  • Virginia Municipal League
  • Annual Meeting
  • October 16, 2007

2
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3
Governors Strategic Economic Development Goals
  • Enhance VAs strong business climate
  • Programs to support existing business
  • Provide a world-class workforce
  • Reduce disparity between distressed and
    non-distressed areas
  • Emphasize regional cooperation
  • Capitalize on proximity to Washington DC and
    federal assets
  • Support technology, RD and emerging sectors
  • Strengthen position in national and international
    tourism
  • Develop a coordinated international marketing
    strategy

4
VEDP Mission Statement
  • To enhance the quality of life and raise the
    standard of living for all Virginians, in
    collaboration with Virginia communities, through
    aggressive business recruitment, expansion
    assistance, and trade development, thereby
    building the tax base and creating higher income
    employment opportunities

5
Board of Directors
  • Jake Gosa
  • Chairman and CEO,
  • American Woodmark Corporation
  • F. Randolph Jones
  • John A. Mahone
  • Charles H. Majors, Chair
  • President and CEO,
  • American National Bank
  • and Trust Company
  • John F. Malbon
  • President and CEO, PAPCO, Inc.
  • Stephen R. Adkins
  • Chief, Chickahominy Tribe
  • Mary Rae Carter
  • Owner/President, MRC Enterprises
  • W. Clay Campbell
  • President, Martinsville Speedway
  • George B. Cartledge, III, Vice Chair
  • President, Grand Home Furnishings
  • R. B. Clark
  • Charlotte County Administrator

6
Board of Directors
  • David Oliver
  • President, Oliver Cleaning Services
  • A. Carole Pratt, D.D.S.
  • McKinley L. Price, D.D.S.
  • Ike Prillaman
  • Samuel A. Schreiber
  • Regional President, Wachovia Bank
  • James E. Ukrop
  • Chairman, First Market Bank
  • Ex-Officio
  • Patrick O. Gottschalk,
  • Secretary of Commerce Trade
  • Jody M. Wagner,
  • Secretary of Finance

7
VEDP Organization
8
Overseas Offices
Brussels
Tokyo
Seoul
Mexico City
Hong Kong
São Paulo
9
Changing Face of Economic Development
  • Change from Manufacturing to Nonmanufacturing
    Projects
  • Business Services is driving Virginias economy
  • Compressed Timeframe
  • Consultant Usage
  • Internet Usage
  • Process of Elimination, Rather than Selection

10
Themes
  • Business Consolidation
  • Existing Business Retention and Expansion
  • Workforce Development
  • International Focus
  • Incentives Challenge

11
Economic Development Process
12
Recent Accolades

According to ITAA (International Technology
Association of America), the Distributed Services
Initiative is the most proactive example found of
a comprehensive economic development strategy to
recruit advanced technology jobs to rural
localities.
13
VITAL
INVESTMENT
TRADE
BOTH
Foreign Owned Firms
Service Exports
India
Emerging Markets
China
Mergers Acquisitions
Policy
Sales Offices
Brand Virginia
Global Logistics
14
Marketing Outreach FY 08
  • Aligned with strategic sectors
  • Measured results
  • Partner with localities/regions in over 40 events
  • Marketing Missions
  • Conferences and Trade Shows
  • Special Events
  • Focused Marketing Initiatives

15
Marketing Channels
16
Key Target Markets
Advanced Manufacturing Polymers/Composites
Initiative Fabricated Wood Initiative Food
Processing Pharmaceuticals Natural
Resources Chemicals
Security Services Distributed Services
Initiative Modeling Simulation Initiative
Federal Security Agencies Providers Information
Technology Finance, Insurance, HQ Professional
Business Services
Science Research Energy Initiative Biotechnology
/RD Nanotechnology Emerging Industries
Medical/Federal Labs
Transportation Global Logistics
Initiative Automotive Aerospace Global
Logistics Distribution
17
Initiative Strategy
  • Declare sectors Virginia can leverage to drive
    centers of excellence and market leadership
  • Apply intense focus, significant marketing
    resources, and senior management leadership
  • Collaborate with a university to enhance the
    initiative through research and educational
    opportunities
  • Collaborate with public and private sector
    players to define markets and drive success
  • Develop value proposition that leverages regional
    assets

18
Investment and EmploymentFY 2007
  • Totals
  • Investment 2.6 billion
  • Jobs 18,863

19
Key Announcements
  • Grand Opening City of Portsmouth
  • 450 million 210 jobs
  • Coors Grand Opening Rockingham County
  • 229 million 25 jobs

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Marquee Announcements Since September 2005
22
Marquee Announcements
  • Projected Impact of these Announcements on the
    Commonwealth
  • Incentives Awarded 43,638,434 (over ten years)
  • New Jobs Created 2,866
  • Jobs Saved 200
  • Capital Investment 770 million
  • 10-Year State Revenue 209,566,867 (5 to 1
    return)
  • 20-Year State Revenue 504,968,707 (12 to 1
    return)

23
Regional Liaison Network
  • Regional Assistance Market Alignment
  • Understand and facilitate communication of
    knowledge of the assets, weaknesses
  • Be the voice of the region for business
    opportunities
  • Be the point of contact for local and regional
    developers
  • Communicate the VEDP vision and strategy to the
    regional leaders
  • Understand and facilitate communication of
    marketing partnerships

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Regional Targets
  • Northern Virginia
  • Headquarters
  • Technology
  • Valley
  • Science Technology
  • Research Development
  • Energy
  • Central Virginia
  • Headquarters
  • Advanced Manufacturing
  • Hampton Roads
  • Modeling Simulation
  • Global Logistics
  • Southwestern Virginia
  • Energy Technology
  • Wood products
  • Southside Virginia
  • Distributed Services
  • Wood Products

26
Initiatives
  • Modeling Simulation
  • Northern Virginia
  • Hampton Roads
  • Global Logistics
  • Hampton Roads
  • I-81 Corridor
  • Distributed Services
  • Harrisonburg
  • Lynchburg
  • Blacksburg
  • Danville

Planned Initiatives
  • Fabricated Wood Products
  • Southwestern Virginia
  • Southside Virginia
  • Polymers Plastics
  • Southwestern Virginia
  • Southside Virginia
  • Energy, Nuclear Renewables
  • All of Virginias regions based upon energy sector

27
Whats New for VEDP in FY08
  • Marketing
  • Implement the Site Selection Consultants
    Strategy
  • Implement the Executive Pulse software to support
    VEDPs existing industry program by providing
    localities with standard management tool
  • Contract with Lead Generation Consultant focused
    on Federal agencies and contractors
  • Launch the Virginia International Trade Alliance
    (VITAL), a working public-private partnership to
    prepare and implement Virginias International
    Strategy

28
Whats New for VEDP in FY08
  • Marketing
  • Roll out a Global Logistics branding campaign
  • Research a consultant database, develop a contact
    program, and create specific outreach marketing
    events to attract and educate consultants on
    Virginias value proposition
  • Implement a Targeted Call Program directed at
    Vertical Market Companies that have previously
    shown an interest in Virginia
  • Focus on University Outreach

29
Whats New for VEDP in FY08
  • Support
  • Support the Governors Advisory Committee working
    on ways to compete for Mega projects

30
Economic Development Mega Projects
  • Current ad hoc process not meeting needs of mega
    project prospects
  • Difficult to assemble new large sites incentive
    packages
  • Mega Project- 250 million capital investment,
    400 employees, site requirements range from 300
    to 2,000 acres
  • Advisory Committee on Mega Projects established
    at Governors request to
  • Explore alternatives and solutions for Virginias
    competitiveness for mega projects
  • Develop set of recommendations for legislative
    action
  • VEDP engaged Fluor Global Location Strategies to
  • Analyze Virginias Competitiveness
  • Review competitor states' programs (approval
    processes and funding mechanisms)

31
Why Pursue Mega Projects?
  • Major revenue producers for states/regionsExample
    Auto plants averaging 30 million in annual
    revenue
  • ThyssenKrupp AG in Alabama, 2007 (3.7 billion
    investment 2,700 jobs)
  • Toyota in Mississippi, 2007 (1.3 billion
    investment 2,000 jobs)
  • Kia Motors in Georgia, 2006 (1.2 billion
    investment 2,900 jobs)
  • Samsung in Texas, 2006 (4 billion investment
    900 jobs)
  • Catalyst for transforming regional economies
  • Signify to market that states are serious about
    economic development in current competitive
    environment
  • Component of an overall economic development
    strategy
  • Means to drive progress on other key issues
  • Workforce delivery
  • Higher education collaborations
  • Transportation improvements
  • Increase brand awareness and image projection (VW
    in VA media exposure)

32
Incentives for Selected Virginia Mega Projects
33
Consultant Perceptions of Virginia
  • Competitive in regards to business climate
    factors-lowest in Worker Compensation
  • Current incentives are not perceived as
    competitive
  • No visible site development programs
  • Incentive approval process unclear for mega
    projects and considered High Risk
  • Can Virginia deliver?
  • Put company operations and decisions at risk

34
General Findings
  • Virginia is strong in overall multi-state
    business climate competitive analysis
  • Limited recent success in closing mega deals in
    Virginia
  • 2 out of 40 top deals landed in Virginia (Site
    Selection 2003-2006)
  • Both Philip Morris USA and Micron had strong ties
    to Virginia and no new site had to be developed
  • Three areas of study focus emerged
  • Lack of competitive mega project sites
  • Lack of funding mechanism for site and incentives
    programs of sufficient scale to win these deals
  • Approval process with General Assembly is
    uncertain for companies

35
Advisory CommitteeRecommendations
  • Guiding Principles
  • Incentives continue to be performance-based with
    agreements and claw-back provisions
  • State programs designed to attract mega projects
    should build on Virginias diversity and benefit
    the entire Commonwealth---rural, suburban and
    urban
  • automotive and other advanced manufacturing
    operations in rural areas, as well as
  • corporate headquarters and service-related
    projects in suburban and urban areas
  • Recommendations should promote regional
    cooperation and solutions to help transform and
    benefit the regional economy

36
Advisory Committee Recommendations
  • Establish a State Site Planning Grant Program
  • To proactively identify and develop sites for
    strategic regional targets
  • Encourage regional efforts
  • Administered by VEDP
  • Competitively selected and geographically
    dispersed
  • 6 Regions
  • Local match of 25 required some local control
    of site needed
  • Funding phased to support environmental,
    geotechnical reviews, engineered solutions for
    infrastructure

37
Advisory Committee Recommendations
  • Amend existing legislation to permit bond
    financing for certain economic development
    initiatives
  • Consider ways to develop an approval process
    that gives prospects comfort when the General
    Assembly is not in Session
  • VEDP initiates process with Secretary of Commerce
    and Trade and Governor
  • Supported by ROI, decision brief
  • Key metrics reviewed ( return, high wage,
    strategic need, etc.)

38
Resources
Economic Development Handbook for Local Elected
Officials
A Guide to Business Incentives
Virginia Allies Website www.VirginiaAllies.org
Economic Development Resources
www.YesVirginia.org
39
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