Pro Tip # 11: How to Work With Economic Development Players to Get Incentives For Your Project
Most regions have an ecosystem of economic development players at the local city/county, regional, utility, state, and federal levels whose primary purpose for existence is helping attract investment and jobs to their respective territories and secondary purpose is to help retain and protect their existing companies. The Economic Development Directory is a good first place to look to identify the economic development players for the localities and regions which you are considering as a site for your business.
Most are very protective of their existing employer base – particularly their “successes” that they promote on their websites.
Typically, each city or county has some form of an economic development arm. Most have one or more tech parks, industrial parks, incubators, and/or speculative buildings. This can range from a formal, funded development corporation, often called an Industrial Development Authority (IDA) or an Economic Development Authority (EDA), to a part-time role filled by a town or county employee. Some are run by the local chambers of commerce. Some are very effective organizations (e.g. San Antonio or Scott County VA) while others are totally ineffective and neglected. Most of these will be useful contacts. Unfortunately, there will be a few who don’t respond (mostly cases where economic development is a secondary role for another government employee or city leader or where the position may be empty).
Regional players typically represent clusters of 4-8 counties, though some are much larger (e.g. the Texas Panhandle organization that represents 60+ counties). The effective ones usually have some grant and loan funding and serve to augment their local counterparts. For our purposes, they are most useful for providing introductions to local players for counties for which we do not have any contacts. State agencies play a similar role but for their entire state. University players are mostly focused on getting jobs for their graduate, consulting for their faculty, selling university IP, and getting tenants for their tech parks (for larger universities like VA Tech or UVA). Although many utilities have economic development arms, these entities are really focused on generating demand for power not reducing demand.
Tips for Effective Meetings with Economic Development Players:
- Physical meetings are more effective than phone calls – use the call or email to schedule a meeting. Most will want to give you a tour of their primary resources (mostly tech/industrial parks) and higher education facilities. These “tours” are a key metric for most of these organizations.
- Show an interest in their community – be aware of their hot button issues related to economic development and their local economy. Sadly, most regions of the U.S. desperately need jobs and investment and many don’t get potential projects to visit as often as they should.
- Use the regional and state players to get access to local ones.
- For the smaller organizations, you want to deal directly with the executive director or person in charge. However, for the larger ones with many employees (typically serving large cities/markets), you want to deal with 1 or 2 levels lower with the contact for business recruitment/attraction or the person who specializes in your industry sector.
7 Things to Do Before Making Contact with Economic Development Players:
- Research the economic development player’s local market to identify potential customers. Identify the major employers and businesses in each county. Also find out which businesses are located at IDA tech parks, business parks, and building complexes. Determine which of these businesses are viable customers.
- Most will promote or list their major employers as well as the tenants at IDA tech or business parks. Also, find the local chamber of commerce website – for smaller towns and counties, this may be one of the best directories of local businesses that are part of the community.
- Also look at the IDA board members – many of these organizations will have board members who represent major employers or players within their community. These can be great intro contacts to get access to the right people at their company.
- Research to find potential partners in each of these regions. You will need to identify resources such as:
- Lenders & Investors
- Distributors for your products
- Identify the largest commercial real estate brokers in your area. There are relatively few of these players in most areas (relative to your typical real estate agents for focus on home sales). Find the ones who have a 20% to 50% market share in your target areas. Get a meeting with them. They typically know all of the players.
- Identify the 3-5 best potential customers – particularly ones for which the local economic development players can provide introductions to help you get meetings scheduled.
- Have a brief 1-2 page overview document that you can email them before a meeting.
5 Core Messages and Things to Ask When Meeting Economic Development Players:
- Provide a brief overview of your business, the planned investment, and the jobs you would create in their jurisdiction.
- Give examples of how your project can help their community.
- Tour their facilities – particularly their tech parks and higher education facilities. This is a great way to get introductions to potential customers and suppliers.
- Explore their grant and incentives.
- Ask for a recommendation of local contractors for your construction needs.