Industry Focus: Economic Development

Left to Right: Paul Lucy, North Dakota Department of Commerce; Ashley Alderson, Bowman County Development Corp.; Russ Staiger, Bismarck/Mandan Development Association; Kathy Stremick, Walhalla Economic Development Corp.; Chris Schilken, Forward Devils Lake Development Corp.; Deb Walworth, Prairie West Development Foundation; Tom Rolfstad, Williston Area Development Corp.; Bev Voller, Hazelton Development Corp.; John Phillips, Economic Development Association of North Dakota; Melissa Beach, Traill County Economic Development Commission; Gaylon Baker, Stark County Development Corp.; Ellen Huber, City of Mandan; Mark Vaux, City of West Fargo; Connie Ova, Jamestown/Stutsman County Job Development Corp.

For many companies the opportunities available in the Roughrider State are easy to see. Even so, economic development agencies have their work cut out for them overcoming issues such as infrastructure and housing. Recently, executives representing several of economic development agencies across the state met at the Bismarck offices of the North Dakota Department of Commerce to discuss these issues.

Connie Brennan, publisher and editor-in-chief of North Dakota Business Magazine, served as moderator for the event. These monthly meetings, sponsored by North Dakota’s Department of Commerce, are designed to bring industry leaders together to discuss issues pertinent to their fields. Following is a condensed version of the roundtable discussion.

How important is it to have a locally funded economic development agency?

John Phillips: The critical need is to have a point of contact, especially in the rural communities. I work in a number of rural communities because I also work with Lutheran Social Services Housing. Without that point of contact, that community would really struggle. There’s a lot of development, a lot of opportunities that could be offered in the community. Typically, in a rural community you have an elected mayor, an elected city commission without a lot of full-time staffing in that community. There’s really no point of contact or anyone that understands the programs or can provide the information of contact for a developer or business that’s looking to expand or grow in your community. It’s a critical need for those communities that want to have growth or any development.

Paul Lucy: I think also what you have with an economic development professional in a community is somebody that, over the years has developed a certain level of skill sets that you aren’t going to get with the typical volunteer. Now, you have some very exceptional volunteers, exceptional cases like with Bev Voller where she is stepping up and she’s taking responsibility and doing a bang-up job for their community. That’s rare that you’ll find somebody in a community that doesn’t have a professional person that will take on that responsibility.

Bev Voller: Time constraint is huge. And I certainly can see the benefit of having a paid position, and it would be beneficial.
Are there overlaps with the Chambers in your area?

Ellen Huber: No. I think we provide a lot of really useful information that chambers aren’t tracking. From a standpoint of businesses coming into a community, be it large or small, they’re looking for information, and I think they’ll find a wealth of that with the economic development entities within the various areas.

Thomas Rolfstad: There’s a real connection between chambers and economic development. The chamber is more of a political force to be making sure we maintain a good business climate, not only locally but even statewide and nationally. That’s probably one of the most important roles they play. They are a force of business and they represent the business and that’s huge. We’re probably more involved. We’re that relationship salesman that, if you have a realtor or a developer who’s working property, they want to talk to somebody who’s an independent third party so that they’re not getting schmoozed just on a sale. We have to be responsible because we work with elected officials and whatnot. We can’t just puff our way through a real estate transaction. We have to actually deliver credibility in the terms of, is this the culture of the community and is this something that the community wants. If it is something the community really wants, is it something we’ll go the extra mile and accomplish.

Gaylon Baker: It’s more of an art. The number one thing we do is get the right people to meet the right people and talk business with them. A distant second is bringing in the tools to help deals happen.

Is there good collaboration between the economic development entities?

Baker: Sure. In Southwest North Dakota we’ve been meeting as a group of economic developers from the area for 15 years. So we collaborate.

Huber: We are just embarking on a major new collaboration. There are two consortiums in the state that have applied as groups of municipalities for the U.S. Treasury Small Business Credit Initiative, and so the City of Mandan is leading one of those consortiums and there are 36 other cities and one Indian tribe. Most of the folks sitting around the table here today are part of the Mandan consortium, and it stretches from Fargo and West Fargo and Casselton to Williston and many other communities in between. We’ll be receiving $9.7 million for business loan programs.

Kathy Stremick: Collaboration is very important in Region IV, which is Pembina County, Walsh County, Grand Forks County and a lot of Cavalier County, west of us. We’ve had the economic development office for a long time in Walhalla, so we get a lot of calls from people outside my area, in other counties. A lot of times what I do is give them a phone number and the right person to go talk to in their area because they don’t know who that person is or so forth. Being so close to the Canadian border we get a lot of Canadians. We had a Canadian come down and he was going to set up a grain-handling feed. He was looking at some of our industrial property. I felt the best fit for him was an elevator for sale in Cavalier, which he didn’t know about, which was 25 miles from me. That was a much better fit for him, so I directed him that way. Not that I wouldn’t have liked the business myself, but it’s in the county and it was a way better fit for him.

What is the Department of Commerce’s role in economic development?

Lucy: The way I look at it from my position is, we are a resource to them, to the local development folks. There are some communities that may not have a person and then we’ll take on more of a lead role, but our preference is always to have the local person drive the activity and we are a resource to make all the connections with the state and address issues at a state level when necessary and appropriate. I always considered myself as a liaison between the community and the client or the business or whoever it might be. That’s the way I see our role here at the state, as the liaison between people that come to the state and want to move out towards the community. We see ourselves as a staff to the clients and a staff to the economic development people as well.

Voller: As a volunteer, it’s been really helpful to have the commerce department as that contact because we’re not as involved in economic development as much as we should be or have the time to be. I rely heavily on the commerce department. There are a lot of cities that don’t have a paid position. The smaller cities are struggling because there’s no funds for it.

Stremick: Well, I can say the Department of Commerce and every department head have made every one of my projects easier and successful. Without them, I don’t know if we could have accomplished a lot of things that we’ve accomplished over the years.

Melissa Beach: One of the important points to remember is that we’re all serving our area and we’re looking out for our area, but ultimately it’s what’s best for North Dakota and then the relationships that come along with the clients that we’re serving. So, if it’s a client that’s coming across the border from Minnesota or from Montana that we’re working with that maybe isn’t looking at us right now or maybe they’re considering. But, five years down the road if we provide a good service to them, will they come back and look at North Dakota again? That’s ultimately what we want to promote.

Is there loyalty to the state among the economic development agencies?

Phillips: I think that would be a good assumption. We’d share with our counterparts within the boundaries of North Dakota before we went out of state. Every effort would be made before that would happen.

Lucy: You do have a couple of development corporations that cover state lines, you know, counties on each side of the line. And, they work to support the activities in their region. I look at it from the state perspective, if something happens across the line, in the county next-door, the state is still reaping a huge benefit from that rather than it being done in Bloomington or Sioux Falls or something like that. So, that happens a little bit. But, more times than not, the effort is certainly to try and keep things within the boundaries of the state.

Rolfstad: There’s enough business to spread around, certainly I hope all the towns in North Dakota can get a piece of it, but it’s going to be bigger than that. It’s going to be something that can help a lot of others. We are more partners than we are competitors in a large sense, not that you might get down to a specific project and there might be more competition, but in general that’s true. The other thing I’m finding out from people is they find people in North Dakota warm, inviting and friendly. They find our state welcoming them with open arms saying, “Come to North Dakota and be a part of our community.”

Huber: Accessibility is a huge strength for our state. If we can bring the governor in when needed on a project and the mayor of any community, having access to those key decision-makers, is something that’s very much a strength in North Dakota.

What makes North Dakota such a great place to do business?

Rolfstad: Well, we have a surplus at the state level, a growing surplus. We’re a right-to-work state. We have the lowest workers comp rate in the country. We just have a good pro-business climate.

Baker: It didn’t happen overnight, it took years of work to get it that way; we’ve done a good job.

Huber: And the diversification of the economy has been a huge thing.

Voller: I think the biggest thing is, in the Midwest there’s that feeling out there that people are hard workers, they’re dedicated, they come to work and they’re warm bodies. They’re welcoming.

Stremick: For a lot of businesses, they can put up a building and hook up to electricity and water just about anywhere. You start looking at some of your rural communities – and when I say rural, I’m even talking Fargo rural communities, you have great education. You’ve got recreation all around you. You’ve got culture. You’ve got heritage. You’ve got family traditions, values, morals, quality of life. I mean there’s a lot of quality of life in every state, but you combine it all together in one, you have North Dakota. That’s important, having all those amenities rolled up into one.

Phillips: I think the quality of life is perceived differently when somebody from out of state moves to the area because their perception of quality of life is certainly different than here. When you visit with them, their perception of quality of life is that their children can walk to school. It’s quality education. You don’t have law enforcement sitting at the door with the monitors watching the school building. When school’s over, you can walk home.

Lucy: It ties back to individuals. Businesses and individuals both have a predictability of stability here. You aren’t going to see taxes go up. You’ve got a sense of comfort that there’s going to be a job for you because the state’s pretty aggressive and progressive in making sure that the economy’s diversifying and growing.

Is it a struggle to recruit companies considering the low unemployment rate?

Baker: Our biggest incentive in the West is something called an oil boom. Basically, in Dickinson right now, if you open almost any business and fail at it, then you are not a very good businessperson. With any concerted effort, whatever business you’re in, you’ll succeed. With the workforce thing, yes, it’s hard to get enough workers with the skill sets that you want. But, if we put more focus on some on-the-job training and are willing to help those people work their way up through the system, there are people out there.

Vaux: Having a low unemployment rate is a double-edged sword. It’s a tremendous thing to tout and it speaks highly of the state in all of our communities, but it is also the biggest challenge in recruiting new companies because, if I’m visiting with Baker, Incorporated, and recruiting them out of Pick a State, USA, and he needs 200 people, his first question to me is, “With a three and a half percent unemployment rate, how can you assure me you’re going to get me people?” The first answer, of course, is wages. If you’re competitive, you treat your people right and you treat them fair, you won’t have a problem. If you’re going to pay them minimum wage, you’re going to have a problem. But, it’s much larger than that. You need to do things to recruit and help. Our number one focus and priority is growing our population base. Another factor is that we’ve got companies that, within five years, 50 percent of their population force will be eligible to retire at full benefits. They’re scared to death. Growing the labor pool is easily our number one priority.

Rolfstad: When the national economy went into recession, all the baby boomers kept working and nationwide they’ve kept working. Now they all want to come here, all the labor force, all generations. Right now we kind of have our pickings. I mean we see 150 new job applicants a day in our Job Service Office in Williston, and I suspect that’s the case across North Dakota. Wasn’t it just the story the other day, you’ve got license plates coming through here from …

Russ Staiger: … everywhere.

Rolfstad: That’s one of the blessings that we have, not that we want to live off the tragedy the rest of the country is facing, but for us right now it’s helped us a lot with finding workers.

This time next year, will labor still be the biggest challenge?

Baker: We’re creating more jobs than we are filling. It’s not just anybody that can fill those jobs. We’re creating quality jobs and for quality jobs you need quality people. That means that they’ve got training, they’ve got skills, they’ve got certifications. There are plenty of people that you can hire to do a skilless job, but there aren’t many skilless jobs.

Huber: A big part of why we’re in this wonderful situation that we are is because of the technology that’s allowing us to recover and optimize our natural resources. You look at agriculture and some of that was policy driven with the diversification that was allowed through the Farm Bill, but a lot of it is technology driven with the breeding of the crops that make them more drought tolerant or disease tolerant in wet seasons, et cetera. Then, you look at our oil and gas industry and the technology that’s been brought to the table and that continues to develop on a daily basis is just going to continue to make those natural resources more recoverable, more valuable to the future. That’s part of why I’m so optimistic about the future of this state.

Ova: The other thing we’re seeing as far as employment is we’re either retaining our college graduates or we’re bringing them back. There’s nothing wrong with people wanting to stretch their wings and go to the big cities and do something different, but they’re coming back in bigger numbers than they were before or they’re staying. Because of the availability of jobs and so forth, we’re seeing more technologically good companies come to North Dakota. So, we’re able to provide those jobs that we perhaps didn’t have for our young people before. They were fleeing to Minnesota and to Colorado and to Chicago.

Do you see any slowdown at all?

Lucy: One of the things people forget is that prior to the recent boom really taking off in earnest; North Dakota’s economy was still on an incline. When the rest of the country was going down, North Dakota’s was going up. That wasn’t by accident. It wasn’t because we have a lot of natural resources. It was because of a very concerted effort over the last 15 years in particular to diversify the economy here.

Stremick: It’s done a flip. Remember when all you ever read about is that we had buffalo roaming the prairie and we didn’t have electricity but we had blizzards, that’s all there was. They never, ever talked about our industry and our natural resources, and that used to just drive me crazy, but now it has turned a major flip. It’s more about the industry and the natural resources and all of that. They still want to talk about tourism and buffalo and the wide-open scenery, but it’s made a drastic change the last five, six years.

Phillips: It still has a ways to go. There’s still a lot of education going on and it needs to be done on the national level, because our natural resources here are pretty heavily scrutinized by EPA. It becomes a constant issue.

What kind of issues does economic development in North Dakota face?

Phillips: We did a study of three major companies. All three of these companies employ well over a thousand people. Their average workforce time was 1.7 years that they could retain that employee with them. We did a ton of interviews with these people, a cross-section of people, older, younger, whatever. One of the biggest issues was the pricing that’s going on in North Dakota right now. But, the biggest issue was they couldn’t move their families to North Dakota. We talked to so many people that just said, “I can’t not see my family for this long a period of time. It’s not working for them.”

Rolfstad: There are a couple of legislative issues, I think, on a larger scale that the governor and legislature have to really look at. We’ve got the best business climate in the country. How do we capitalize on that and how do we even improve it, particularly when we’re sitting with some three and a half billion dollars in surplus, approaching four? Are we going to spend that money? Are we going to reduce taxes? Are we going to build some key infrastructure? What are we going to do with that? To me those are very important issues the legislature faces. Our heritage has been that we’ve been pretty good fiscal stewards of our money and try to have a good tax policy and business climate.

Ashley Alderson: I think a smaller issue for maybe the rural communities more so is child care. We talked about young families moving back to the state. We talked about such a short supply of workforce. Especially in a rural community where you have the service and retail jobs that don’t have that [higher] wage. A working mom is vital to the operation. We started to hear about mothers and a lot of businesses approaching us about what do we do, we have no child care and now these mothers are going part-time or they’re staying home. We were lucky enough in our community to facilitate a project where we brought in an owner of an oil company, and he saw the need and built us a brand-new million-dollar child car facility that my two kids will be lucky enough to go to. That is a big issue on our radar for other rural communities.

What are you most proud of in North Dakota?

Baker: The business climate. The acceptance and that the people embrace progress.

Deb Walworth: And integrity.

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