HomeMy WebLinkAboutItem 01 Springfield Look Community Economic Development and Competitiveness Assessment and Report AGENDA ITEM SUMMARY Meeting Date: 5/8/2017
Meeting Type: Work Session
Staff Contact/Dept.: Courtney Griesel/CMO Staff Phone No: 541-736-7132
Estimated Time: 60 Minutes
S P R I N G F I E L D C I T Y C O U N C I L Council Goals: Encourage Economic Development and
Revitalization through Community Partnerships
ITEM TITLE: SPRINGFIELD LOOK COMMUNITY ECONOMIC DEVELOPMENT AND COMPETITIVENESS ASSESSMENT & REPORT
ACTION
REQUESTED:
Provide initial feedback to consultant based on presented report findings.
ISSUE STATEMENT:
Allison Larsen of TadZo Consulting will present to Council findings of the
Springfield Economic Development and Competitiveness Assessment. This
assessment will ground the next phase the Springfield Look project as staff work with TadZo to begin building the priority strategic initiatives and work plan.
ATTACHMENTS: Attachment 1 – Springfield Look Competitiveness Assessment and Economic
Overview Attachment 2 – Project Timeline
DISCUSSION/ FINANCIAL IMPACT:
In September of 2016, by the direction of Council, the City of Springfield Economic Development Division engaged Allison Larsen with TadZo Consulting to review and assess current economic development practices, priorities, resources
and opportunities and generate a City Economic Development Plan. The plan includes a regional competitiveness and industry assessment, which will be
presented during this work session, addressing findings identified over the last 3
months. These findings were identified through market research, asset and opportunity site inventories and Springfield specific discussions with regional
leaders in;
Real Estate and Development
Talent and Workforce
Permitting and Regulatory Environment
Business Incentives
Business Resources and Support
Utilities and Infrastructure; and
One-on-One Traded-Sector Employer Interviews
Following the presentation of this report, staff will work with TadZo to facilitate
one-on-one interviews and industry work sessions identifying priority strategic
economic development values and initiatives for inclusion in the 3-5 year work plan.
SPRINGFIELD
ECONOMIC LOOK
UPDATE
May 8, 2017 Prepared for:
City of Springfield, Oregon
CITY COUNCIL WORK SESSION
Attachment 1, Page 1 of 14
Attachment 1, Page 2 of 14
TABLE OF CONTENTS
Introduction ......................................................................................................................................................................................................................................... 1
Economic Performance ...................................................................................................................................................................................................................... 1
Competitiveness Report Card ......................................................................................................................................................................................................... 3
Target Industries ................................................................................................................................................................................................................................ 9
Activities for Week of May 8 ...................................................................................................................................................................................................... 10
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INTRODUCTION
This document provides a high-level overview on research completed for:
Springfield Economic Performance
Springfield Competitiveness Report Card
Springfield Target Industries
A preview of activities for Springfield’s Economic Look planned for the week of May 8th is also presented.
ECONOMIC PERFORMANCE
How is Springfield’s economy performing? This research documents key indicators commonly tracked as economic development outcomes. These
factors may be used to help focus on goals for Springfield’s economic development strategy in such a way that this data shows a starting place.
Progress can be tracked from this benchmark level.
Following is a brief narrative for each indicator. Referenced comparative areas include: Albany, OR; Portland, OR metro area; Bend-Redmond, OR
metro area: Twin Falls, ID micro area; Spokane, WA metro area; Salt Lake City, UT metro area; Las Vegas, NV metro area; Los Angeles, CA metro
area; San Jose, CA metro area (a.k.a. Silicon Valley). During the City Council work session, data will be presented for each indicator in easy to read
charts.
Population: Springfield’s population growth rate from 2011 to 2016 trails both the United States (3.9%) and Lane County (3.1%). For additional
context, Springfield is compared to competitors and potential source areas for business recruitment. Springfield trails population growth to all
comparative areas.
Median Age: With median age of 35.3 years, Springfield is the third youngest area ranking behind Salt Lake City metro area (31.8 years) and Twin
Falls, ID micro area (33.8 years). Median age is an indicator of future workforce potential and Springfield has a strength here as the median age is
relatively lower.
Property Value: Total assessed property values have been steadily increasing for the last five fiscal years, with more significant growth rate
experienced since 2014. Over the last ten fiscal years, total assessed valuation has increased by 46%.
Property Taxes: Since FY 2012, the City of Springfield’s portion of property taxes is relatively flat. A GO Bond was paid off in FY 2016, hence a
slight drop in taxes received. Over the last ten years, Springfield has increased property tax receipts by 64%.
Attachment 1, Page 5 of 14
Building Permits: Permit data for new commercial, industrial and other public buildings show the impact of investments post-recession, coming to a
screeching halt in 2011. Fiscal years 2012 through 2015 showed moderate activity while the last two years are robust. 2017 data only includes the
first 3 quarters of FY 2017. The trend for these non-residential permits indicates confidence for building in Springfield.
Job Growth: Benchmarking the job growth rate is first reviewed in context of Lane County, State of Oregon and the nation for 2010 to 2016 change.
Springfield trails all areas. When analyzing to comparative areas – both competitors and potential recruitment source areas – Springfield’s rate of job
growth is consistent with Spokane over the time period of 2010-2016 and lags all other areas significantly. The Bend-Redmond MSA outpaces
Springfield by 20% and San Jose, CA MSA by 15%.
Earnings: The average earnings of Springfield residents exceed Lane County’s average by $6,290 yet still trails the state’s average earning by more
than $3,000 and the nation by almost $8,000. In relation to competitors, Springfield’s average earnings are higher than Albany, OR; Bend-Remond,
OR; Spokane, WA and Twin Falls, ID. Larger urban areas of Las Vegas-Henderson, NV; San Jose-Sunnyvale, CA; Salt Lake City, UT and the Portland,
OR metro area have higher average earnings in 2016.
Poverty: Communities seeking to make transformative change often focus on reducing the poverty rate so that economic development helps residents at
all socio-economic levels. Springfield exceeds all comparative areas for all categories (all people, all families, families with children under 5 years old)
of poverty. This data should be a call to action for the community.
Attachment 1, Page 6 of 14
COMPETITIVENESS REPORT CARD
Springfield’s capabilities, limitations, unique assets and competitive advantages in relation to fundamental site selection factors were assessed as to
how Springfield is viewed by a site selector in meeting the needs of traded-sector industries. The findings from this research will be used to identify
areas to address in Springfield’s Economic Development Strategy and for the capabilities screen of potential target industries Springfield will
proactively pursue for business recruitment.
The fundamental site selection factors are rated on an “A” to “F” scale as defined below:
A = Factor is a world-class competitive advantage.
B = Factor could be competitive advantage but missing key elements.
C = Resources can be found in many communities.
D = Fundamental assets necessary to attract investment are missing.
F = Extreme gap. Disadvantage so great it would be a deal killer.
SPRINGFIELD RATINGS
The following presents factors and Springfield’s corresponding rating. During the City Council work session, the assessment detail to support rating will
be explained.
FACTOR WHY IMPORTANT RATING
Transportation – Highways
Number, quality and variety of interstate highways and major
highways connecting to the outside world.
Communities that are well positioned with modern infrastructure
that supports the movement of people and goods to/from region
are more competitive.
A -
Transportation – Rail
Number, quality and variety of interstate highways and major
highways connecting to the outside world.
Communities that are well positioned with modern infrastructure
that supports the movement of bulk materials and freight to/from
region are more competitive.
B
Attachment 1, Page 7 of 14
FACTOR WHY IMPORTANT RATING
Transportation – Air
Assets related to commercial, private and air cargo services are
important links to bring people and high value products to the
community.
Local commercial, private and cargo airports with good service
(the more carriers, the better) are important to support a diverse
and modern economy.
B
Transportation – Ports
Extent and quality of barge dockage and equipment for handling
bulk commodities and equipment.
Presence of U.S. Customs in region.
Barge infrastructure with service to other inland and ocean ports
provides inland regions competitive advantage when supporting
the movement of bulk materials and equipment.
C +
Transportation – Intermodal
Number and quality of intermodal services including ground to rail,
ground to air, ground to barge.
Intermodal facilities provide options that help to support a diverse
economy.
D
Real Estate – Available Sites
Variety and quality of ready-for-development sites for:
Heavy industrial
Light industrial
Commercial office
Research park
Certified sites
In a global economy, corporations generally are constrained by
tightened time schedules and budgets. Consequently, ready-to-go
sites offer advantages over properties needing time and resources
to ready for development.
Importance of certified sites: a third-party managed program that
certifies sites as "Shovel Ready" provides an edge when competing
with communities without certified sites. These programs assure
end users that properties have cleared typical due diligence
requirements.
C
Real Estate – Available Industrial Buildings
Variety and quality of ready-for-occupancy:
Manufacturing buildings
Distribution buildings
Incubator/Accelerator Space
Spec Building
In a global economy corporations, generally are constrained by
tight time schedules and budgets. Consequently, ready-to-occupy
buildings offer advantages over properties needing time and
resources to make ready.
D +
Attachment 1, Page 8 of 14
FACTOR WHY IMPORTANT RATING
Real Estate - Office Buildings
Variety and quality of ready-for-occupancy:
Class A
Class B
Class C
In a global economy corporations, generally are constrained by
tight time schedules and budgets. Consequently, ready-to-occupy
buildings offer advantages over properties needing time and
resources to come up to readiness.
B +
Infrastructure & Utilities
Reputation of service provider
Capacity and costs for water, sewer, electricity, natural gas,
telecommunications
Planned upgrades
A community runs on its physical infrastructure. A community is only
as strong as its weakest link to serve business growth.
B
Permitting & Regulatory Environment
Permitting and approval process – clear, consistent, fair
Speedy permitting to support project timeline
Is the regulatory approach punitive or helpful?
Competitive communities understand time sensitivities for business
and work to not only operate in a speedy fashion, but with clear
explanations to manage expectations and reasoning behind
process steps.
C -
Human Capital – Labor Pool
Comprehensive and up-to-date documentation of available workforce
skills, worker demographics, and movement of workers within the region
that supports investment from targeted industries.
Location of local labor force
Availability of management
Availability of technical skills
Availability of semi-skilled workers
Recruiting and retention of technical and managerial level
Employees
Workforce is the single most important factor in virtually all
corporate location decisions. Confidence in talent availability
comes only from information derived from local sources.
B
Attachment 1, Page 9 of 14
FACTOR WHY IMPORTANT RATING
Human Capital – Labor Costs and Productivity
Labor costs and productivity across the spectrum of skills and employer
types are competitive relative to the practices common to targeted
industries.
Competitive wages
Unionization
Work ethic
A community is less attractive if it is not competitive on wages and
productivity relative to what a company can find at other
locations.
B
Human Capital – Training Resources
Community has a long tradition of leading in the effort to train workers
for current and future industry needs.
Public schools (K-12)
Community College
Colleges & Universities
To be successful companies must have a workforce that is trained
to meet current needs, and ready to acquire next-generation skills.
A -
Business Resources – Innovation
Extent of programs and resources devoted to identifying and nurturing
economic game-changing technologies.
Research institutions
Technology transfer
Technical assistance
Communities that are global technology leaders often do so by
nurturing ideas.
B +
Business Resources – Entrepreneurship
Extent of programs and resources devoted to fostering a nurturing
climate for entrepreneurs.
Entrepreneurship programs
Incubator & acceleration resources
Small business assistance
Communities that stand as economic leaders against global
competition often do so by nurturing entrepreneurs.
B +
Attachment 1, Page 10 of 14
FACTOR WHY IMPORTANT RATING
Business Resources – Financing
Community provides a wide range of financing resources for companies
to meet their business growth needs.
Access to financing
Flexibility of land pricing
Availability of equity investment capital
If financing is not available locally, companies may be required to
move out of the area to access more available financing resources.
This is especially true for start-up businesses.
B +
Business Climate
Understanding business needs and community tone to support business.
Community support for local business and economic development
Community support for future growth
Overall community tone welcoming new businesses
Economically successful and stable communities don't become that
way in a vacuum. Common elements of successful communities are
organizations and individuals dedicated to an environment that
supports business vitality.
B
Mitigated Risks
Community recognizes risks, real and perceived, and work at
mitigation and manage information.
In a highly competitive and rapidly changing global economy,
companies increasingly looking to mitigate risks that could
undermine business strategies and operations.
A -
Sustainability
Number and depth of programs aimed at social, environmental, and
economic sustainability within the community, such as:
Community sustainability plan
Local energy conservation and efficiency programs
Local recycling and reuse programs
Innovation in sustainability
Downtown development
Corporations are increasingly adopting operating strategies that
incorporate sustainable business practices. Communities that
similarly engage in these practices are more attractive to forward-
thinking companies.
A community-wide sustainability plan is essential for managing and
coordinating the myriad of factors that shape the community
through time.
B +
Attachment 1, Page 11 of 14
FACTOR WHY IMPORTANT RATING
Incentives
Knowledge of and ability to articulate state incentive programs
Local incentive programs offered to attract businesses and entice
local expansions, especially to priority target industries
Formal incentive policy in place that includes eligibility standards,
project evaluation, incentive level matrices, exceptions, and
compliance
Economic and/or fiscal impact analysis conducted for each project
in consideration of incentives
Performance measurements, compliance agreements, or claw backs
in place for incentives awarded
When it comes to attracting new business investment from outside
or winning expansion decisions for local companies, incentives help
states and communities demonstrate support for the company’s
project. Incentives offer a way to “level the playing field” when
variable development and operating costs are at a penalty for a
particular project. Service incentives are another way of
supporting a project, typically from a time concern.
Nevertheless, incentives cannot solely override all other factors to
the degree that the wrong community for a project will secure the
win.
C
Attachment 1, Page 12 of 14
TARGET INDUSTRIES
The Springfield Target Industry Analysis presents methodology, data and rationale related to the identification of recommended target industries for
the City of Springfield. Targeting industries is not done at the exclusion of other business recruitment opportunities. If leads come to the City outside of
targets, the City should work leads if Springfield can accommodate. The research
identifies industries that align to Springfield’s capabilities. Targeting as an economic
development practice for business attraction and expansion enables a focus for
proactive marketing strategies and smart resource allocation.
The Target Industry Analysis focuses on traded sectors – those industries that bring new
wealth into the local economy in the form of investment, jobs, payroll and local purchasing.
Traded-sectors contribute the greatest economic impact to an economy.
The recommended targets build on both Springfield and the region’s competitive assets
as Springfield can leverage regional assets for local employers.
The table at the right presents the proposed industry clusters and corresponding NAICS
for target subsectors. The targets represent the best opportunities for Springfield within
the next five years, for the most part. Some of the targets may require the community
to work on additional asset development and positioning in the market to be competitive
for business recruitment.
During the May 8 City Council work session, Allison Larsen of TadZo will explain research
and analysis that led to the selection of these target industries for Springfield.
SPRINGFIELD TARGET INDUSTRIES
NAICS DESCRIPTION
Specialty Food Processing
311920 Coffee and tea manufacturing
311520 Ice cream and frozen dessert manufacturing
311812 Commercial bakeries
311813 Frozen cakes and other pastries manufacturing
311821 Cookie and cracker manufacturing
312111 Soft drink and specialty manufacturing
312120 Breweries
311412 Frozen specialty food manufacturing
Technology
511210 Software publishers
519130 Internet publishing, broadcasting, web search portals
541511 Custom computer programming services
541512 Computer systems design services
541513 Computer facilities management services
541519 Other computer related services
Value-Added Wood Products
321213 Engineered wood member manufacturing
321114 Wood preservation
337212 Custom architectural woodwork and millwork
337122 Wood household furniture manufacturing
325191 Gum and wood chemical manufacturing
Medical Tech
621511 Medical laboratories
Attachment 1, Page 13 of 14
ACTIVITIES FOR WEEK OF MAY 8
During the Week of May 8th, Allison Larsen of TadZo will be in Springfield to coach the City further into the strategic planning process. Scheduled
planning activities include:
May 8 – Springfield City Council Work Session, presentation of research. Outcome: understanding of findings from initial research.
May 8 – Springfield Traded-Sector Employer Focus Group. Outcome: prioritizing employer challenges and where employers would like assistance.
May 9-10 – City Council interviews. Outcome: input for economic development strategy.
May 9 – Springfield Stakeholder Input Session, Outcome: input from economic development partners for economic development strategy.
May 11 – Priorities Work Session with Springfield Economic Look Leadership Team. Outcome: in consideration of all input and research, the Springfield
Economic Look Leadership Team will define priorities for Springfield’s economic development strategy.
By the end of the week there will be a clear direction for development of Springfield’s economic development strategy, which will be presented in
draft form to City Council in June.
It is noteworthy to point out that Springfield’s attention to economic development is timely as the week of May 8th is International Economic Development
Week.
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Attachment 2
2017 SPRINGFIELD LOOK PROJECT PROGRESS TO DATE