When it comes to economic development, corporate relocations get a figurative ticker-tape parade. And given the bragging rights that come with luring jobs and dollars to one's local community from some faraway place, it’s no wonder they do.
Nonetheless, as a new crop of industry retention programs in Sumner County shows, existing businesses that add more jobs or just stick around warrant fanfare, too.
As Clay Walker of the Gallatin Economic Development Agency explains, the perception of existing industry’s role in economic development can be a “funny thing.”
“Some people think those companies either expand or close, and that’s going to happen no matter what you do. That’s not true,” Walker says. “It’s not just coincidental that communities with strong existing industry programs lose fewer companies and have more expansions.”
Walker started the Gallatin Expansion and Retention program, or GEAR, five years ago with the goal of improving the city’s relationships with its local companies to better assist those businesses with their collective goal to thrive and grow.
To date, Walker credits the program with the retention of five companies and “several hundred jobs,” as well as 10 to 12 business expansions, such as Linatex Corp.’s March announcement that it will build a 12,000-square-foot expansion and create of 20 jobs at its manufacturing facility.
It’s those kinds of successes that have prompted the Sumner County cities of Hendersonville, Portland and White House to follow Gallatin’s lead. Through collaborative meetings with Walker and his colleagues, each of those cities has launched an existing industry program within the last year.
At the core of each program is a quarterly meeting for each city’s existing businesses. This was the first offering of GEAR, and it’s the backbone of each of the programs in the other communities. The meetings, often held at one of the participating companies’ facilities, provide programming or a speaker on a topic suggested by one of the companies, as well as an opportunity for networking among attendees.
Businesspeople benefit by sharing and learning best practices with one another, getting information on the topic of the day, and having the opportunity to share any concerns with their local economic development team.
Angie Carrier, White House city administrator, says the biggest benefits of the WHIRL program – short for White House Industrial Retention Link – are the relationships that are formed. Those relationships, which might not have started otherwise, help bolster the community, she says.
Carrier need only look within county lines toward Gallatin – and its experience in retaining five companies Walker says it was “very, very close to losing” – to support her point.
In those cases, the companies had established strong enough ties with officials like Walker that they could approach the ECD team and talk about the possibility that a particular plant or office may move. That allowed Walker’s team to help those companies make a case to those companies’ leaders or corporate parents about why that company should consolidate its operations in Gallatin and not move jobs elsewhere.
In addition, Brenda Payne at the Hendersonville Area Chamber of Commerce believes establishing relationships with existing businesses may lead to securing new corporate citizens in the future. By making existing industry feel valued and providing them with resources, company leaders are more likely to speak favorably of the city to industry colleagues who may be considering a relocation now or in the future.
To provide further value, the more mature GEAR program offers additional services. For one, it performs a periodic wages and benefits survey for its city and some surrounding communities to help participating companies measure whether they’re making competitive personnel decisions and whether their pay and benefits are competitive.
GEAR also offers a program for matching existing businesses and industries with workforce, training and education resources, as well as one to help companies connect around items that one business may want to trash and another may find of use.
In Portland, the Sustaining Existing Economic Development, or SEED program also has an extra component, wherein economic development officials make periodic visits to local industry to discuss state incentives for growth and expansion and check in with them on any issues or needs they may have.
“Tennessee is bordered by eight different states, and in order to compete for industry, we must offer cutting-edge programs and incentives,” explains Denise Geminden, community development director in Portland. “So when the State of Tennessee adds or updates those incentive programs and makes them available to existing industries who might have a chance to grow and expand, we keep local industry abreast of that.”
From the overall county perspective, the work of these Sumner County cities to focus on existing business programs is critical to ECD success.
“Expansion of your existing business base will always be the lifeblood of a successful and growing community,” said Ace Harrington, chairman of Forward Sumner Economic Council, which provides economic development services for Sumner County and offers industrial and commercial sites for business development. “The retention and expansion of our manufacturing base throughout Sumner County is vital to our overall economic development, and our communities are doing a great job with their excellent programs.”
From the statewide perspective, Tennessee Economic and Community Development spokesman Mark Drury echoes that sentiment. In fact, over the last few years, more than half of the jobs created in Tennessee have come from existing industry, he says.
“It’s been pretty consistent – 60 percent to 70 percent have been from existing industry,” Drury says. “New projects, generally speaking, tend to garner more attention than expansions, but we do a lot more expansions.”