When it comes to wooing industries, Emporia has hit a hot streak.
In about a year’s time, the city has gotten no less than three new industrial projects to sign on the dotted line — the Westar peaking plant, the Renewable Energy Group biodiesel plant and a new pet food plant for Hill’s Pet Nutrition. Add in a couple of local expansions at Norfolk Iron & Metal and Detroit Diesel and that’s about $500 million of investment in the community and between 190 and 195 new jobs.
For the Regional Development Association of East-Central Kansas, Emporia’s chief industrial recruiter, it makes a nice change. For too long, Executive Director Kent Heermann said, there just weren’t many prospects to be had.
“You had a slowdown in the economy on the manufacturing side in 2000,” Heermann said. “And Sept. 11, 2001, initiated a recession for everyone. It wasn’t until 2002 or 2003 that the economy started recovering from that. ... As the economy gets getter, more projects get out there and we happened to be in the right place at the right time.”
To a certain extent, Emporia has put itself in that place. Since the 1990s, the city has used a half-cent sales tax to create a war chest for drawing industrial prospects. It’s been able to offer property tax breaks and other incentives to get businesses like Norfolk, Menu and Caterpillar (now Camoplast) to take a second look at Emporia.
But while incentives may get a community a second look, Heermann said, the first one has to come on merit.
“Incentives are tie-breakers, not deal-makers,” Heermann said. “Incentives evaporate away in a very short period of time. At the end of that time, you’d better be a good place for them to do business.”
So what do you pitch? Well, there’s the old real estate mantra: location, location, location. Emporia sits in the country’s midsection near major highways and a good rail line. That was a good draw for American Nutrition, the company that bought the Emporia Pet Food plant in April. It was part of what hooked Norfolk back in 2000. Hill’s liked the idea of being close to its Topeka headquarters but far enough away to avoid total loss in case of a tornado. Location even helped attract Lenze back in 1997 — at least until the company decided it was more economical to concentrate its operations back East and closed the Emporia plant down this year.
That’s an important thing to remember: nothing stays the same. Even location can be a disadvantage if the circumstances change.
“There was a Canadian company we were courting a few years ago called Premier Peat Moss,” Heermann said. “Their plant in Manitoba had a fire and they started looking at options. The management said ‘We’re shipping all this peat ... down to Texas, Oklahoma and Kansas. Let’s look for a site in Kansas, Oklahoma or Missouri to ship it by rail.”
It seemed logical, until the company ran its business plan. With rising gas prices, the railways had more business and were giving fewer discounts. It made more sense to ship the material from Canada to Texas and then backhaul it from there by truck. And so, the feelers Premier Peat Moss had been sending out to Emporia were withdrawn and never returned.
Other things can help or hurt a sales pitch as well. Some are hard to affect, like the area’s labor pool and prevailing wage rates. Emporia can compete on the plants with a couple of hundred blue-collar jobs, Heermann said, but doesn’t really have the available manpower for anything huge.
“A 1,000-employee company probably won’t look at us unless there’s a very compelling reason for them to be here,” Heermann said.
Unique resources can offer that compelling reason. Part of what brought REG to town, for instance, was the presence of Bunge’s soybean plant. That meant REG could get the soybean oil it needed locally, simplifying its costs and logistics enormously.
What often helps Emporia get in the door in the first place is available land. The burst of activity that hit Emporia in the late ’90s and again this last year has focused on Industrial Park III, to the point where Emporia Enterprises has had to make some additional land purchases.
It’s going to take a little work to keep that edge sharp, though. Right now, Heermann said, Emporia could offer a 44-acre tract, a 15-acre tract and a 14-acre tract in Industrial Park III. Industrial Park IV has a spacious 151 acres available but still needs a lot of work on infrastructure before it’s “shovel-ready.” And of course, that leaves out sites like the former Lenze and Modine plants, where the buildings are complete if a prospect wants them.
“We need to look at real estate and see what other opportunities are out there,” Heermann said.
For the moment, it may be time to digest. Three new industrial prospects in any year is a lot for one community.
“You can get to a point where there may be so many projects that an employer is reluctant to come in,” Heermann said.
And once that settles? Well, data centers present an interesting possibility, Heermann said — stand-alone sites with a number of computers to help the Googles of the world. Those areas need reliable electricity and lots of it, a good central location, fiber-optic cable, a fair amount of labor ...
Maybe the next pitch isn’t so far away after all.
Westar
Number of jobs: Four
Projected average wage: Around $65,000.
Number of construction jobs to build: Between 80 and 200, seasonally determined
Investment: $330 million
Expected completion date: First phase, May 2008. Second phase, May 2009.
REG
Number of jobs: 30
Projected average wage: $44,000
Number of construction jobs to build: About 100
Investment: $70 million
Expected completion date: September or October 2008
Hill’s
Number of jobs: More than 100
Projected average wage: $44,000
Number of construction jobs to build: Not available
Investment: Over $100 milllion
Expected completion date: Before the end of 2009.
sciguy (anonymous) says...
"Well, data centers present an interesting possibility, Heermann said — stand-alone sites with a number of computers to help the Googles of the world. Those areas need reliable electricity and lots of it, a good central location, fiber-optic cable, a fair amount of labor ..."
I am glad to see that they are at least paying lip service to non-blue-collar options. I'll keep watching to see whether anything comes of it.
Kudos to the Gazette for putting a little numbers-based meat into this story. Would still love to see a comparison of gains/losses by job category over the past decade or two.
July 17, 2007 at 10:35 p.m. ( permalink | suggest removal )