Chamber tells city: Don’t hire recruiter

Tuesday, May 12, 2020

During its monthly study session Tuesday night, Shelbyville City Council members were grilled by Shelbyville-Bedford County Chamber of Commerce Board members as to whether they’ve consulted local business leaders on their plan to hire a full-time industrial recruiter. Bill Rich, treasurer and chair of the chamber’s division of Economic Development and Tourism (ED&T) board said during a presentation, “The Chamber has.”

Rich’s hour-long presentation, which highlighted industrial recruitment effort on behalf of the Chamber, was actually presented by former Chamber board member Harold Segroves, as Rich was unable to attend the session. In the end when all the statistics were given, and council was discouraged from its current course of action regarding industrial recruitment, council members asked Segroves, a local realtor, if he would buy into the city’s decision to hire its own industrial recruiter. The lifelong Bedford County native expressed a firm “no,” but he vowed to stay friends with those sitting before him.

After all, his position Tuesday night was merely messenger for the ED&T board and Rich, who currently serves as the chamber board’s treasurer and chair of the economic and development tourism board. Professionally, Rich has served several years as chief executive officer of Tennova Healthcare-Shelbyville.

Speaking for many

“I am here representing the Chamber and 350-plus businesses in this community,” stated Segroves, on behalf of Rich. “I want to remind you that the Chamber isn’t Allen Pitner [CEO] . . . isn’t its staff. The Chamber is my organization, Tennova, Newell Brands, Mugraves, Albea, Century Mold, First Community Bank, Peoples Bank, Middle Tennessee Pharmacy Services, Dabora and 350 plus other large and small businesses in Shelbyville. Collectively, we are the Chamber.”

On behalf of Rich, Segroves thanked the city for allowing the Chamber’s presentation into the full study session, which was videoed electronically for Facebook and held at Shelbyville Recreation Center, due to COVID-19 social distancing orders. Council did have a lengthy study agenda, and with Rich’s presentation, clocked in a three-hour session.

Segroves said the presentation isn’t just a “wish list,” but one with “real outcomes with measurable deliverables.” He referred to Convergent Outcomes Lab in Atlanta, which when hired for its consulting expertise, surmised how the Chamber’s fully implemented industrial recruitment plan would result in $28 million in new payroll for this community, $2.5 million in additional bank deposits within the community and an estimated $15.5 million in new consumer spending in the community.

A city plan?

“How does this compare to the city’s plan?” Rich asked in his message. “What are your anticipated, deliverable, measurable results? Does the city’s plan even have stated objectives or strategies?”

These words, among many, seemed to get a rise out of City Council members during the question and answer session, which was fielded by Segroves at the end of the presentation. Council members listened attentively to Rich’s entire presentation before making their own comments at the end. (Those city responses will be in a future installment in the Times-Gazette, along with comments by Chamber CEO Allen Pitner.)

The ED&T board has expressed its concerns lately with the city’s decision to reclaim local hotel-motel tax revenues as that money, around $250,000 a year, would continue to benefit Chamber economic strategies. However, the two entities have not ventured into a public roundtable discussion on the subject of a new industrial recruiter, pointed out by some city officials Tuesday night. (The city finished accepting applications for the new position on Friday.)

The City has formally entered into a contract with Bedford County Commission, putting up its half of $200,000 seed money to get the new industrial recruiter office started. The county has agreed that Shelbyville City Manager Shanna Boyette will supervise the position, much like she does with public works and other departments, but the recruiter’s skills would also be honed by the county.

Tennessee General Assembly has put its initial approval on changing the city charter and giving the privilege tax revenue back to the city to use for industrial recruitment. Council is expected to send its required majority ap night.

Less revenue

Rich hit council members, already struggling with some unanticipated expenditures and lower anticipated revenues due to COVID-19, where it hurts, in the coffers. “I know you have been realizing and budgeting to deal with a reduction in revenues,” he wrote. “While the demand for government services is growing, no doubt hotel and motel occupancy taxes and sales taxes will diminish. Property tax payments are likely to decrease as well. Is not the time to go alone, without the business community’s support, with a stand-alone industrial recruiter?”

The hospital executive stated in his presentation how local business leaders have indicated readiness to invest $1.2 million over the next five years into the plans of the ED&T board. He suggested how that shot-in-the-arm could literally double the city and county combined investment, which it will likely be needing in the coming fiscal year.

The Chamber has stated previously that a collaborative public-private partnership provides the most flexibility to leverage the greatest volume of resources. Rich said those partnerships “exponentially” expand the city and Chamber’s collective ability.

“Together, we accomplish more. Every successful community in the middle Tennessee region, and almost every successful economic development program throughout the country, are partnerships. Speaking for Rich, Segroves drove home the part of his presentation which stated how public support, leveraged with private resources, produce what the Chamber sees as “winning results.”

“Now, as we come out of the COVID crisis, is time to be together. On behalf of the business community, I implore you, don’t miss this incredible opportunity. Our citizens deserve your best, and our best. And our best is collaboration.”

Solo recruiter vs. Chamber experience

The Chamber stands firm that it has operated a strong business retention and expansion program which has recently retained Newell Brands and assisted with their $11 million capital expansion and the addition of what Rich says are 115 “new local jobs.” Rich added the Chamber has partnered with the Tennessee Department of Economic Development to facilitate 13 expansions that have resulted in “1,500 jobs and $196 million in capital investments in Shelbyville.”

“That is some pretty good success; particularly with existing business retention and expansion. At the same time, we share your frustration over not landing prospects in the [industrial] park. With that concern in mind, we began developing a more comprehensive economic development plan. Knowing that implementation would come with higher costs, we conducted very thorough research. We hired the nation’s most respected economic development fundraising firm, Convergent Nonprofit Solutions, to collect individual, confidential feedback. They interviewed 52 local business leaders and their report was delivered in early January.”

Rich pointed out some of those findings cited the Chamber’s business retention and expansion program as one of its biggest strengths. He said when it comes to a stand alone government-run industrial development recruiter, the Chamber has researched that only 16 percent of businesses interviewed believed that to be a good idea, he said.

“Actually, there is strong support for a full-time dedicated economic development professional, however, the majority of interviewees are more comfortable seeing that role continuing through the Chamber.”

Rich claims that the research shows that 91 percent of interviewees consider the Chamber to be “effective” and about 51 percent said “highly effective.” He said the interviewees (demographics not disclosed Tuesday night) expressed “excitement” that someone in the community finally had a plan.

The plan

Segroves, (quoting Rich) said the Chamber has launched a fundraising initiative to generate $1.2 million from the private sector. He advised the ED&T board is laying the groundwork for this plan and has remained on schedule-even with the COVID-19, due to the Chamber’s “extraordinary response.”

The report stated that further details are available about the Chamber’s plan-one which he said has four components, 13 specific objectives and 37 total strategies-but that it’s “multi-faceted and comprehensive.” He told council it tackles a number of economic development factors such as workforce preparation and small business services and copies are available.

He mentioned Scott Cocanougher, First Community Bank CEO, whom he says has already committed to chair the fundraising campaign. He told council that 90 percent of business leaders interviewed last fall have agreed to consider volunteering in the campaign as well.

“Forty of those businesses indicated a willingness to invest substantial resources. When else in the history of this city have dozens of community businesses come together with such eagerness to pay more than taxes . . . grow this community?”

Site elimination

“With the link between education and economic development stronger than ever before, many businesses are concerned about the ability of any industry, whether new or existing, being able to find qualified employees. As recent as just before the COVID crisis, there were 500 unfilled jobs available in the community. Business leaders are crying for stronger schools and technical training — a part of the Chamber’s plan.”

Segroves, who has been in business here all his life, as well as his family, presented also the Chamber’s take on the industrial development process. He advised that site selection is really a “site elimination process.”

“Often dozens of sites are under consideration until they get eliminated for one reason or another. After all sites and communities are thoroughly vetted, one location is chosen,” Segroves said.

Rich pointed out to Council the most common factors in the site selection process is product-land availability and acquisition costs and existing building availability, be that shell building or slab already poured, he said. Then, there’s “location, location, location,” according to Rich, not to mention such facets as the condition of the local school system in comparison to others in the area.

Rich explained that new industries and businesses look for strong local support, which doesn’t just mean “nice people,” but community leaders working together. He said “site selectors” use mathematical scorecards, basically eliminating fairly fast those they don’t want.

“Obviously, weaknesses in any area can hurt a community score,” Rich stated, adding “site selectors” know more about the city than government leaders realize before they even start their score cards.

Rich said in the last five years, the Chamber has worked with 15 prospects that have continued through the “rigorous” evaluation process to the site and community visit stage. He stated how in that time, none ever questioned the professionalism of economic development or factored such skills in the Chamber’s scorecard.

“The Tennessee Department of Economic Development, TVA and experienced site selectors are all comfortable and confident in the Chamber,” Rich said.