Ladies and Gentlemen:
We are here today to ask that the City become a significant funding partner of the Economic Development Council (“the EDC”) and that your designated representative retain a seat on our Board of Directors, a board whose size has recently been reduced to 16 individuals from an unwieldy 28.
About nine months ago, I met with City Manager, Steve Burkett, to discuss the above. He was quite clear that in his view the EDC had done nothing of consequence for Sequim and politely denied my request. At the time, I had been Executive Director for only a few weeks. But it was rapidly becoming clear that the EDC truly had done very little for several years to win either your confidence or that of the broader community. In the nine plus months since that meeting our team has taken many steps forward for our County that we hope will prove to you that the EDC is in the process of making significant things happen here. Bringing job growth to our area will, in turn, allow the City of Sequim to better balance its business base, to increase and spread out its tax burden in a meaningful way while creating even more amenities than we have today.
I would like to explain how we operate, the importance of our relationship with the Department of Commerce, and then point out a number of projects that will indicate the level of our activity. First, you need to know that throughout 2014 we operated with 1.5 individuals (myself and Jennifer Linde who acts as our accounting and office manager). Jennifer, a remarkable young lady, is now full time. We have prepared a new EDC budget through 2016 which anticipates the hiring of two highly-qualified individuals for a total staff of four. Assuming a growing track record of success, we hope to increase our funding from private sector businesses to a high level by 2018. But in the interim we will be heavily dependent on partners like the Port of Port Angeles, the County, the cities of Sequim, Port Angeles, and Forks, Olympic Medical, the Department of Commerce, the PUD, and, thankfully, on the Opportunity Fund. Many of the partners listed above are moving through their budget process and most tell us that they intend to increase their current level of support. I will explain shortly why these increases are necessary.
HOW WE OPERATE
Per our recent Strategic Plan, attached, the EDC’s major emphasis is on two areas: Business Retention and Expansion (BRE), and the Recruitment of New Businesses to the area. For the first, we try to provide advice and assistance to any business in our County. We can help to compose a first-class business plan and we have two experienced volunteers who can provide business savvy along a wide spectrum. We can help identify many sources of financing. Additionally, there are exciting tax incentives available to County businesses because our levels of unemployment are so high. These advantages are not well-known and need to be carefully explained to each business owner – and many then need help in implementation, which we will try to provide. Just one example is the new “tax abatement” program introduced this summer by the Department of Revenue. It will allow a new or expanding business to save about 8.4 percent on nearly every dollar expended on new facilities. The Special Notice of this program from the Department is attached. As said, there are other such programs available to rural counties like ours and our team needs to be conversant with each and every one. The inducements described here are extraordinary and provide our County with serious competitive advantages when competing head-to-head, say, with King County. Of special importance is our relationship with Peninsula College which is also one of our financial supporters. Led by President Luke Robins, the College aims to be the state leader in Workforce Training. The tailored programs made available to expanding companies in the region are a major selling point to outsiders. State grants aimed at reducing unemployment through workforce training can often be obtained – leading to trained employees at no cost to the company and with a fully-paid program which financially benefits the College.
RELATIONSHIP WITH THE DEPARTMENT OF COMMERCE
Economic Development Councils were established in Washington’s counties in the 1980’s with the idea of stimulating business growth on a local level. The State Department of Commerce runs the EDC program, advises each county EDC, and financially supports each EDC. This year, Clallam County will receive about $51,000 in support from Commerce. However, beyond that support, Commerce supplies each EDC with a constant flow of information on companies that may be looking to expand operations to suitable locations in our state. We receive a regular “Hot List” of expanding companies and any we deem logical for our County receives from us a careful proposal which attempts to define what we have to offer and why such a business is important to our community. As just a sample, a recent proposal to a boat-builder (Project MX) is attached. The proposal was prepared in collaboration with the Port, Peninsula College, and the City of Port Angeles. Merely responding to opportunities on the “Hot List” with proposals like the above is a daunting full-time job. But our team has much more to do.
Projects and Activity:
Business Retention – Since April our team has visited over 75 area businesses seeking to understand what they do and to grasp any need they have. Most are highly independent, as one would expect. But we are currently doing the following:
Helping a high-quality auto repair company regarding red-tape issues relating to its expansion, advising on tax incentives available for the expansion, and introducing a source of financing that is considerably less in cost than that supplied by its current bank.
Helping an excellent truck and storage rental company to secure the various tax breaks mentioned earlier to lower the costs of its future expansion projects.
Helping to secure tax savings, debt and equity financing, as well as giving management advice, for a manufacturer in Sequim that ultimately expects to employ 170 people.
Working with a local hospitality company to secure low cost financing, tax abatements, and city cooperation for a new hotel/conference center in Port Angeles.
Advising another growing Sequim manufacturer on all the above as it plans its next stage of expansion.
Working with various air carriers in an effort to replace recently departed Kenmore Air with an airline that will provide direct connecting flights from Fairchild to SeaTac. Without first-rate air service we will become a third-rate County.
Doing all we can to encourage the passage of the bond issues currently on the table to support new infrastructure for the schools in Sequim and Port Angeles. Without fine school systems the society of our entire peninsula will suffer. And recruiting new businesses to the area will become increasingly difficult.
Planning an effort with Ron Allen and the Jamestown S’Klallam Tribe to reach out to the other tribes in our County regarding their own economic development issues. History indicates that a high level of outreach is needed and Ron’s help is essential.
Business Recruitment – Beyond the airlines mentioned above, we are directly recruiting businesses to the area and making regular proposals via the “Hot List” mentioned earlier. There are many in progress:
Project MX – Boat-builder which would employ approximately 70. A decision is expected before year-end.
Another Large Boat- builder is seeking 19 acres at the Port to employ 200. Port Angeles is now in second place to another port city on Puget Sound.
A Call Center for a Michigan company that would require “workforce training” at Peninsula College and employ 150.
A large international company evaluating our state as the site for a Furniture Manufacturing Facility that would employ 400. Note: Thus far, there seems little interest in this size project by any of our cities.
A Vancouver Technology Company that would like to move to the Carlsborg area to be closer to its largest supplier – to employ about 10 people.
A Seattle Specialty Insurance Company that is considering the move of a portion of its business to our County that would employ from 10 to 50 people.
A Lynnwood, WA Technology Company manufacturing state-of-art drug delivery systems would like to move its entire operation to our County. The company needs to complete an equity raise of about $10 million to assure the move and we are actively helping them to secure the most ideal funding sources. The company would ultimately employ about 150 people.
A highly successful Water Remediation Company based in Gig Harbor that seeks to build a brewery in Forks. Management sees great value in the purity of water from the Hoh Rain Forest and envisions the name for its beer to be “Rain Forest Brew”. Initial meetings with key individuals in Forks were held in mid-December and a follow-up is expected in March. First-year employment is expected to be about 50 people. Note: Many hurdles to this project remain.
A third Builder of Offshore Supply Vessels, aluminum crew boats, and barges is now considering a move to 10-25 acres at our Port. Anticipated employees are unknown at this time. Note that this company and the two boat-builders mentioned above all would seek workforce training at Peninsula College.
Website Development – Before spring we expect to roll out an outstanding new EDC website whose primary purpose is to “sell” Clallam County. The photographs we have assembled are stunning. The site’s numerous videos are more so and include your own recently produced “How Do You Say Sequim?” The entire site is a special celebration of the beauty and diversity of our peninsula. Every entity associated with the EDC will be recognized with appropriate links. Each business member will be advertised with links to their own business website. Jennifer Linde has carried nearly all the water on this task and she can’t wait to share it.
ORGANIZING TO PERFORM
I trust you can see that the growing levels of activity far outpace the ability of two individuals to manage. The potential jobs creation for our community is real and is significant. That is why we need your help today. We hope you will consider making a commitment to the EDC substantially above the $5,000 per year Sequim is currently providing. The two individuals we intend to hire are expected to be well-educated, to have deep business experience, and to have fire in their bellies. They will need to rapidly assimilate the essence of any business in order to understand its needs. They will have to sit across the desk of a successful CEO and sell him or her on the values of Clallam County. They will need to craft persuasive proposals in meticulous fashion.
A QUICK WORD ABOUT THE OPPORTUNITY FUND and LONG TERM SUPPORT
Our County Commissioners recently voted to allocate $200,000 in both 2015 and 2016 to the EDC with an additional $100,000 in 2017. We are grateful. The Commissioners see that we cannot entice the high-quality individuals described above without genuine clarity that the organization they are joining is strong and solvent. New team members need to feel comfortable that their careers – as long as they perform, of course — are not at risk. The County’s expectation is that by 2018 at least one-half of the EDC’s funding will come from the Private Sector. Today, Private Sector members provide less than one-sixth of our Interim Budget for 2015.
Please know that the EDC team and its board have taken this challenge very seriously. In the past two months we have entered a forceful fundraising drive. In 2014, EDC funding from the Private Sector approximated $12,850. At this moment – but with miles to go – Private Sector commitments for 2015 have risen to $36,250. Our business members, old and new, have recognized the efforts we have reported above and have begun to step up their support. With increased staff we are confident that we can start to deliver ever-increasing employment and a vibrant economy. And by 2018 we expect to meet the County’s expectations.
CONCLUSION:
Sequim’s commitment, along with the other major funders we have named, is critical. This city, where my wife and I have lived for twenty-one years, is attractive to new employers. Distance helps. Many of those employers want easy access to Seattle. With your help, good things will happen here. Be assured, however, that we view our relationship with the City of Sequim as a two-way street. We will be accountable and we will report regularly. We will always welcome your concerns and want to address them. If you come to feel that the EDC is not delivering the goods to the community as expected, then you should cancel your commitment to us. Among the attachments below is a budget which indicates the Public Sector supporters of the EDC (and their amounts) including the cities of Sequim, Port Angeles, and Forks.
Thank you.
Yours sincerely,
Bill Greenwood
Executive Director
Clallam County Economic Development Council
