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Chamber Gives Commission ED Task Force Final Report

Tuesday night the Manhattan Chamber gave the City Commission the ED Task Force Final Report. Here is as much of the report as the Free Press has room:

BACKGROUND

This report is a result of a request from the City of Manhattan to the Manhattan Area Chamber of Commerce. The City requested that the Chamber provide recommendations for a "framework" that would assist the City Commission in making decisions with regard to allocations of existing and potentially future economic development funds. Current funds include the remaining funds from the last sales tax initiative and repayment of MEDOFAB loans.

The Chamber formed the "ED Task Force" (Task Force) to ensure a comprehensive, diverse analysis of the options. The Task Force includes citizens and elected officials with a broad base of community and business experience. In addition, the Task Force meetings were held in an open forum and other citizens were welcome to attend and comment.

Members of the ED Task Force include: Don Wissman and Sue Maes (Co-chairs), Nelson Galle, Gary Greer, George Ham, Nancy Knopp, Jeff Levin, Bill Muir, Debbie Nuss, Carl Reed, Maureen Riggs, Steve Shields, Bruce Snead, and Michael Wilds. Ron Fehr (City), Stan Morgan (County), Lyle Butler (Chamber), Chuck Scott (Chamber) and Stacy Kohlmeier (Chamber) also served ex-officio.

PURPOSE of ED TASK FORCE

The Task Force goals are:

1) Determine the use of public funds

2) Develop a model to determine the criteria for the use of the funds

3) Determine who will govern the funds

ECONOMIC DEVELOPMENT GOALS

Task Force members agreed that community economic development objectives have not changed. Providing incentives to businesses is done in pursuit of the following goals:

• Create quality jobs with corresponding wages, benefits and working conditions

• Diversify the property tax base in Manhattan

• Decrease reliance on federal, state, and local government for jobs

• Maintain, stabilize, and build on the existing strengths of the community

• Invest public funds in ways that create self-sustaining economic development activities

• Use public funds to leverage private investment in economic development

GUIDELINES FOR USE OF PUBLIC FUNDS FOR BUSINESS INCENTIVES

The Task Force recognizes that there will be times when it is essential to consider providing business incentives utilizing public funds in order for the Manhattan/Riley County community to be competitive with other communities working toward similar economic development goals.

The Task Force recommends the following guidelines to the City of Manhattan for their consideration with regard to allocating public funds for business incentives:

• Loans/Grants: Provide capital to existing and new businesses for projects related to new growth and expansion which further the community’s economic development goals.

• Infrastructure: Provide infrastructure improvements related to needs of businesses or to assist in making property useable and available for businesses or other designated economic development activities (i.e. affordable housing developments, etc.) Includes having pre-zoned land available.

• Manhattan Holdings, LLC: Assist businesses or organizations that assist businesses in the start-up phase of the business cycle.

• Quality of Life Issues: Enhance, promote, or provide for quality of life issues (i.e. affordable housing, recreation, healthcare, workforce, schools, etc.)

• Job Training: Promote, enhance, coordinate, or provide training to existing or new labor force in the area to assist in keeping that workforce in the area.

• Business Relocation Expenses: Assist with the costs of relocating a business operation to the area.

• Buildings, Land and Equipment: To provide speculative buildings, land, and equipment to expanding or relocating companies already in the area or to new businesses that may be looking to locate in the area. To provide a streamlined process and assistance to businesses that are seeking to construct new facilities in the area.

NOTE: Appropriate "clawback" provisions should be included to protect the city’s investment in the event the goals and objectives outlined in Applicant’s business proposal are not met.

FUNDING CRITERIA MODEL

The Task Force recommends that the City take a "three-pronged" approach which includes both quantitative and qualitative factors that can be used in analyzing and allocating funds to economic development projects.

1) Base Wage Structure (40%) - increasing the overall wages of workers is reflected in the weighting of this factor. (See Attachment 1)

2) Community Return on Investment (ROI) (40%) - the ROI analysis quantifies the overall economic benefit to the community in aggregate. (See Attachment 1 and 2)

3) Community Fit (20%) - this factor is the most subjective of the three but is an essential element in the analysis. (See Attachment 1 and 3)

The Task Force believes that these tools will provide the Manhattan City Commission with the ability to perform a thorough and consistent analysis of each project while maintaining the flexibility to consider variables that will differ on a case-by-case basis.

FUNDING GOVERNANCE

1). The Task Force recommends that the Manhattan City Commission adopt a set of guidelines and criteria that assist them with the decision-making process, since the ultimate responsibility for making allocations of City public funds rests with the Commission. The preceding sections of this report set forth such guidelines and criteria for the Commission’s consideration.

2) The Task Force further recommends that the application process remain "open" and that no set agency, board, or organization have the sole responsibility or designation to bring applications for economic incentives before the Commission. However, Applicants would have the opportunity and be encouraged to obtain technical assistance from entities such as The Manhattan Area Chamber of Commerce Economic Development Division, the Mid-America Commercialization Corporation, the Small Business Development Center, or any other business consultant the Applicant deems appropriate.

The diagram outlines steps that should be included in the City’s process of considering and determining an Applicant’s request for economic incentive funding.

3.) The Task Force also recommends that the City of Manhattan pursue the concept of economic planning and development from a regional perspective. The Task Force believes that the concept of regional economic development will be successful if a team is developed that includes members from appropriate economic development entities from the region. It is further recommended that representatives from the Manhattan Chamber, Riley County and the City of Manhattan designate individuals from each organization to lead this effort and engage regional partners. A true regional economic development team is essential to make this concept a reality.