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Shot Across Partnership Bow May Be Followed By An Ax
By SCOTT D. YOST
July 10, 2014
The Greensboro Chamber of Commerce was founded in 1877 by Julius Gray, the president of NC Railroad Companies, to enhance business opportunities in Greensboro – but now, after 137 years, there’s a move afoot behind the scenes to fundamentally rethink the way Greensboro attempts to create a better environment for business and draw new business to the area.
That effort may mean the creation of an entirely new economic development lead organization – either public, private or somewhere in between – that in the future takes on the leadership role for economic development and recruitment in Greensboro.
Greensboro Economic Development Alliance President Dan Lynch, who for years has been the most public face of for the economic recruitment efforts in the Greensboro area – announced earlier this year that he would be retiring at the end of 2014, and, with Lynch leaving in a matter of months, many Guilford County commissioners said they felt it was the perfect time to reevaluate the county’s current economic development efforts.
When Lynch announced his retirement a few months ago, privately some area leaders were saying it was about time. Especially in recent years, there hasn’t been much success bringing business to the area, and some commissioners and others commented on the high salaries of the economic development officials and a growing dissatisfaction over the results of the Greensboro Partnership, or a lack thereof. According to the most recent records available from the City of Greensboro, Greensboro Partnership President Pat Danahy makes $295,000 a year while Lynch makes $200,000.
Several Guilford County commissioners said one thing fueling the current talks of a new organization is that they were disturbed by a rumor that’s been circulating that the Greensboro Partnership plans to keep Lynch on as a paid consultant after he “retires” next year.
Lynch didn’t return a phone call to the Rhino Times to confirm or deny that rumor.
One commissioner, when asked if keeping Lynch on as a consultant at the Greensboro Partnership would jeopardize that group’s annual county funding, chuckled and said, “Their funding is already in jeopardy.”
Regardless of what happens with Lynch, there’s no question the Guilford County Board of Commissioners and the Greensboro City Council have been engaged in public and private discussions over what many elected officials and others say is a lack of effectiveness of the current economic development cabal in Greensboro – which consists of an ever-shifting amorphous collection of groups that now fall under the umbrella of the Greensboro Partnership.
Frustration over a lack of results in Greensboro has now led some county commissioners, along with city councilmembers and local business leaders, to propose creating a new economic development group. Advocates of a new development group – or of putting those functions under local government – say the new paradigm would ideally be more responsive to the needs of area business owners and be more accountable to the private and public bodies that fund economic development efforts.
During the recent budget process that shaped Guilford County’s new 2014-2015 budget, adopted last month, many questions were raised about the cost, responsiveness and effectiveness of the Greensboro Partnership – the Greensboro economic development group that includes the Chamber of Commerce, Action Greensboro, Economic Development and Entrepreneur Connection.
That group got most of the annual county funding it usually gets – $175,000 of the customary $200,000. The Guilford County Board of Commissioners took $25,000 from that group’s budget and gave the money to High Point Economic Development Corporation, which many commissioners viewed as having a better performance recently. According to several commissioners, that move was meant as a message – it was a shot across the bow of the Greensboro Partnership.
Here’s the message: The Greensboro Partnership can’t count on Guilford County to fund it every year as a matter of course.
Some commissioners said this week that the partnership would be wise to realize that it shouldn’t necessarily count on any county money in the future, because the county may channel its development and recruitment efforts through an entirely new organization or through a new government entity created to take over those duties.
Commissioner Ray Trapp said nothing is final yet, but he added that one option some commissioners and some county administrators favor is for Guilford County to “bring those efforts in-house.”
Other options include a public-private partnership designed to be more responsive to the needs of area businessmen than existing groups are.
Commissioner Hank Henning said this week that the discussions about what to do are heating up and he added that there are a lot of options being discussed.
“I think everything is on the table,” Henning said.
The commissioners and county staff have been looking at everything from a new in-house economic development division to a new organization run jointly by the private sector and area local governments.
“Whether it’s government doing it or a public-private partnership, I would consider all of that,” Henning said.
Henning said the commissioners have been hearing complaints that the Greensboro Partnership doesn’t communicate enough with local business leaders.
“One complaint about what we are doing right now is that businesses in the region haven’t really been contacted very often,” Henning said.
Henning said it’s important that any group trying to grow the local economy not neglect existing business owners.
“If you are local and you have a business, those are people who should be contacted – those are people who have skin in the game,” Henning said. “The bottom line is that, if you are not talking to those people, then you’re doing something wrong.”
According to Henning, it’s the private sector that creates jobs, and government can help by doing things like lowering taxes, improving education and removing obstacles for starting a business. He said the driving force behind economic growth is not a bunch of men in suits flying off to tell people what a nice area this is.
“Business doesn’t happen because a bunch of consultants talked to a company,” Henning said.
One commissioner who didn’t want to be identified said that Lynch and other representatives of the Greensboro Partnership “did not interface with local business leaders.”
This complaint has also been echoed by local business leaders recently. For instance, Kayne Fisher, a co-founder of Natty Greene’s Pub & Brewing Company in downtown Greensboro told the Rhino Times earlier this year that, the whole time he and his partner were growing their business, they never heard from the economic development groups or saw an effort to help.
Fisher said that one day he was shocked when a representative of an economic development group called – to ask his advice about how to draw a competitor, Stone Brewing Company, to the city. Fisher said the economic development official who called him said this area could use a beer scene and Fisher said he was taken aback because Greensboro and the triad already have such a vibrant beer scene, but that was completely missed by the economic development official on the phone.
That story captures the sentiment a lot of people have been expressing recently – that too many of the old-school economic development people are collecting big salaries and flying around the country while failing to produce.
Chairman of the Board of Commissioners Bill Bencini, who’s running for High Point mayor this year, said it should be obvious to any casual observer that there’s a feeling among commissioners that Guilford County has to do something different with in its economic development efforts.
“I think you know from the budget process there was some dissatisfaction,” Bencini said.
Bencini also said that there hasn’t been a decision on what a new type of structure would look like.
Commissioner Alan Branson told the Rhino Times recently that it rubbed him the wrong way whenever area economic development officials gave presentations to the Board of Commissioners and talked about flying to Paris to “roll out the red carpet” for businesses.
Branson said those trips are paid for with taxpayer money and he said most small business owners and other taxpayers wouldn’t want to see their money spent that way, especially given the lack of results in recent years.
Commissioner Jeff Phillips also said he’s engaged in the talks to see something new in the economic development and recruitment world. Phillips said there has been a “level of dissatisfaction” with the status quo, and he added that county leaders need to “rethink and retool as necessary.”
According to Phillips, given the commissioners’ duty to spend taxpayer money wisely, it’s not just a good idea, but a requirement that they look at ways to do things differently.
“It is incumbent upon us as a board,” Phillips said.
“The consideration of an alternative method is on the table,” Phillips added. “It’s too soon to say what that may look like.”
He said that, given the resources of Greensboro and the funding that the groups get, there’s frustration that Greensboro isn’t seeing more results from the existing organizations.
Guilford County used to have staff dedicated to economic development but those positions were eliminated and, as it is now, there’s really no one in Guilford County government designated to working with companies that express an interest in opening a business in this area.
The county’s incentives program is now under the Guilford County Planning and Development Department, and while Leslie Bell, the director of that department, seems to be handling those duties ably, he is doing so in addition to the many other responsibilities of running the planning department and he is not charged with spearheading economic recruitment to the county.
It’s no secret that Guilford County Manager Marty Lawing is very focused on economic development. It’s what he was known for in Brunswick County, where he was manager for over a decade before coming to Guilford County last year, and it’s one of the primary reasons he was chosen over other candidates for the county’s top administrative job.
Lawing said Guilford County is exploring options for furthering economic growth and one of those options is some sort of economic development division or staff within county government that would be devoted to attracting businesses.
One thing commissioners say they want to see in any new organization or county branch is accountability. Henning said some people seem surprised that the commissioners are now asking the question, “Is this money well spent?”
Henning also said it’s his opinion that some economic development officials in Guilford County have gotten too comfortable with the assumption that county funds are a given each year, and he added that there’s absolutely nothing wrong with the local governments holding economic development agencies accountable for the service it provides, since it funds those organizations.
Henning said that, if the usual groups get the same amount of money every year no matter what, and the consultants keep their same salaries regardless, there’s no real accountability.
“What is the incentive to produce?” Henning asked.
He said there should be objective standards of success for the Greensboro Partnership and other area economic groups the county funds. He said that – unlike the current situation where no benchmarks are in place – the commissioners should be able each year to say, “You didn’t meet the threshold.”
“On the flip side,” Henning said, “they don’t get any bonuses that I know of if they have a big success.”
Several commissioners said that, if a big business does locate in Guilford County, it’s difficult to tell what role if any economic recruitment leaders played because, whenever a company happens to come to town, everyone is eager to jump in front of a television camera and claim credit.
Branson said he thinks lower taxes would do more than just about anything to help revive the local economy and bring new investment. He said that in the past the emphasis has been on getting groups like the Greensboro Partnership to bring in more business, but rather than paying out that money it makes more sense to lower taxes.
“It’s all about trying to bring in business, but to what expense to the taxpayer?” Branson said. “We just can’t continuously operate the way we have been. We have to do some sort of restructuring.”