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Tri-Cities Economic Development Alliance entering 'pivotal year'

Sharon Caskey Hayes • Mar 1, 2008 at 12:00 AM

Finley Green, director of communications and special projects for the Regional Alliance for Economic Development, and Andy Burke, chief executive officer of the alliance, stand inside the organization's offices in the Northeast Tennessee Business Park. David Grace photo.


Three years ago, some of the region’s most influential business leaders gathered for a press conference in Johnson City to announce a new organization with lofty goals: Create 7,200 high-paying jobs in five years and raise the region’s average industry wage by 20 percent.

They called it the Tri-Cities Economic Development Alliance, hired a firm to raise funds to sustain the organization for five years, and a few months later, introduced veteran economic developer Andy Burke to lead the effort.

Now three years later, the organization is facing its “pivotal year,” said Burke, chief executive officer of the group now called the Regional Alliance for Economic Development.

“2008 is a pivotal year for this organization and I think for this region,” Burke said. “My goal right now is to have a great year.”

In his 2007 annual letter to alliance investors, Chairman Scott Niswonger said the organization continues to gain momentum toward its goal of adding quality jobs to the region. He said more than 14,000 jobs were added from the third quarter of 2005 to the third quarter of 2007, based on information from the East Tennessee State University Bureau of Business and Economic Research.

“Although we primarily credit local city and county economic development partners with this job growth, there continues to be growing value in presenting a unified region with its collective assets and amenities,” Niswonger wrote.

Just how the alliance has impacted job growth and economic development will be examined later this year. And those findings will determine whether or not the alliance will continue as it is today.

Burke explained that the alliance is based on a five-year economic development concept which started in 1960 in Atlanta. There, the chamber of commerce spent half of every year raising funds to do its work for the other half of the year. Corporate Atlanta collectively agreed to change direction.

“They said, ‘Let’s just create a big pile of money that could fund it (economic development efforts) for five years, and then they can work for five years.’ That was the beginning of this five-year concept,” Burke said.

And that concept is what area leaders adopted for the alliance. In the first year, a fund-raising firm secured millions of dollars from private and public sources to sustain the alliance for five years, and Burke was hired in September 2005.

Next, Burke conducted a work force analysis to determine the skills and education of the local labor market. He also developed a cluster study to determine which industry clusters would best be suited and attracted to this region.

Armed with the work force analysis and cluster study, the alliance was then prepared to launch an aggressive marketing effort in 2007, Burke said.

“Our focus is on positioning this region in the global marketplace, and we do that through site location consultants, corporate real estate executives and national brokers,” Burke said.

The alliance started its efforts last year through direct communication with companies that might be interested in moving or relocating their operations. It targeted companies in three core clusters identified as good matches for the area. Those industry clusters were automotive support operations, pharmaceuticals, and aviation companies.

The alliance developed a database of about 3,000 companies in those industry clusters, and launched a direct mail postcard campaign to get their attention.

“And there have been several things that have happened that at least have gotten us in the door to make people aware that we are here,” Burke said.

Two postcards have already been distributed, while a third is scheduled to hit the mail this week. The latest postcard targets Japanese industries, and it’s printed in both English and Japanese.

“It’s just part of our process of introducing companies to our region. We think that’s been an effective tool,” Burke said.

He and Finley Green, the alliance’s director of communications and special projects, have also attended consultant forums to get the word out about the region. These forums, started seven years ago in Colorado, are designed to bring together economic developers with industry consultants who may be looking for places to establish new operations.

“You have 15 minutes privately with consultants you choose, so it is face to face,” Green said.

Burke said the forums offer the most effective way “to get in front of consultants.”

“You’re getting exposure that you wouldn’t ordinarily get,” he said.

Burke said the alliance also uses the races at Bristol Motor Speedway as a way to bring consultants, real estate professionals and brokers to the region. This month, Burke will play host to five consultants, who will stay at the General Morgan Inn in Greeneville, and be greeted as suite guests for a BMS race. In the past couple of years, Burke has brought in more than 20 consultants to see races, and in turn, see the region.

“Those are the kinds of things that will begin to pay off,” he said.

But it may not be evident before the alliance marks its first five years in existence. Burke said that in the typical five-year economic model model, at the end of the organization’s fourth year — which will be 2008 for the alliance — a third party will conduct a “return on investment analysis” and evaluate the progress made to date.

“They’ll use a number of different economic models to evaluate the impact that your organization has had on reaching the goals that your organization has set out to achieve,” Burke said.

Once that analysis is conducted, the alliance’s leadership will decide if it wants to go to the next step in the process — and that’s another feasibility analysis of the life of the organization, Burke said.

If the feasibility analysis is positive, and the leadership opts to continue the organization, a fund-raising firm is typically hired to launch another capital campaign, Burke said.

In the case of the alliance, that fund-raising campaign would be conducted in 2009.

“And then you start your next five-year period in 2010,” Burke said.

He said he’s already started making calls to investors and has gotten positive feedback on the alliance’s efforts.

“I’m getting the sense from our investors that they understand the necessity of sustaining a program like this over a long period of time,” Burke said.

He said he’s headed economic development organizations based on the five-year concept in other areas of the country, and in each case, it takes seven, eight, even 10 years before the work starts to pay off.

“I’ve had to learn to be patient. That’s what I’m helping some of my board to understand, that we’ve got to be patient. We’ve got to be relentless in our pursuit of what we’re trying to achieve. And most importantly, we’ve got to be committed to sustaining the effort over a long period of time,” Burke said.

At 64 — he’ll turn 65 this year — Burke may not be around for the next five-year period. He said he’d like to stay long enough to see the end of the next fund-raising campaign, which would run through 2009.

“My goal right now is to have a great year this year, hit ‘09 to get this capital campaign under way, and then to be able to announce victory in late September (2009) and have this seamless transition right on into 2010 to keep this thing rolling. That’s my plan, and I’m excited and energized,” he said.

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