2. Background, Objectives & Study Methodology · 2. Target Industry Analysis Identify industries for attraction, expansion, retention and small business growth based on the competitive

2. Background, Objectives

& Study Methodology

Koochiching County & International Falls Economic Adjustment Strategy 2

Project Background

In September 2014, the Arrowhead Regional Development Commission (“ARDC”) solicited proposals from qualified consultants to prepare an “Economic Adjustment Strategy for Koochiching County and the City of International Falls”. The ARDC retained the Global Corporate Consulting group of Newmark Grubb Knight Frank (“NGKF”) to undertake this effort.

� Primary objectives

• Guide development of a growing, sustainable, and diversified economy for Koochiching County;

• Provide specific and targeted implementation steps that can help retain, grow and attract new investment and jobs; and

• Define target industries within the sectors that best align with ARDC’s strengths and assets.

� Funders and Leadership Team

• Arrowhead Regional Development Commission

• Northspan Group Inc.

• U.S. Economic Development Administration (Chicago Office)

• Koochiching County

• Koochiching Economic Development Authority

• City of International Falls

• International Falls Economic Development Authority


Project Background

� NGKF Scope of Work

• Engage with key project stakeholders for data collection to map the county’s competitive assets

• Develop an available site inventory

• Evaluate the work force and skill sets for gaps and potential assistance programs

• Identify target industries and potential recruitment opportunities

• Evaluate the transportation and logistics infrastructure for potential opportunities

• Identify areas for Cross Border Partnerships

• Conduct a SWOT analysis and Market/Demographic Study

• Compare the region to four peer communities

• Develop a high level marketing strategy with budget estimates

• Provide recommendations including implementation and success metrics


The project was conceived and managed in several phases and undertaken over an eight month period from the first week of January through August 2015.

1. Regional Market Scan & Economic Development Assessment Data collection and preliminary analysis of the regional economy to identify the county’s economic drivers, existing &

emerging industries and existing supply of available sites and buildings.

2. Target Industry Analysis Identify industries for attraction, expansion, retention and small business growth based on the competitive advantages

of the county and the locational needs of the respective industry.

3. Strategic Logistics Analysis Determine and evaluate the quality and accessibility of the area’s logistics infrastructure, as well as, the commodity

flow, capacity and usage of rail and freight shipping airport.

4. Talent Development Strategy Profile existing labor assets to identify opportunities to leverage those assets in growth industries in the county while

also using a reverse site selection approach to determine gaps in workforce skills for the 4 to 5 target industries that

have been identified.

5. Target Industry Recruitment Strategy Using information on the target industries and sub-sectors to develop new marketing messages to potential prospects.

6. Implementation & Inclusion in Northspan’s Economic Adjustment Strategy Work with Northspan to make sure that the Implementation Plan will fold into the Economic Adjustment Strategy.

Project Methodology


The following is a list of the public sector and community organizations interviewed over the course of NGKF’s field visits

� ARDC� Northspan� International Falls EDA� KEDA� Voyage Forward� City of International Falls� City of Northome� City of Big Falls� City of Littlefork� City of Ranier� Koochiching County� Rainy River Community College� Minnesota WorkForce Center� Minnesota DEED� Minnesota Department of Transportation� Minnesota Department of Natural

Resources� Highway 53 Commission

� North Koochiching Sanitary Sewer District� East Koochiching Sanitary Sewer District� International Falls School District� Littlefork School District� Northome School District� International Falls Chamber of Commerce� Backus Community Center� Convention & Visitors Bureau � City of Fort Frances� Rainy River Future Development Corp.� Fort Frances Chamber of Commerce� Bob Walls, Labor Representative� Voyageurs National Park� U.S. Border Patrol� Port of International Falls, U.S. Customs� U.S. Customs and Border Protection � International Falls Airport

Interviews: Public Sector & Community Representatives


The following is a list of the companies interviewed over the course of NGKF’s field visits

� PCA/Boise Paper� Molpus Timberland Mgmt.� Bergstrom Wood Products� MD&W� Wenberg Trucking� Paul Bunyan Communications� MN Power� MN Energy� MERC (MN Energy Resources)� Frontier� Northstar Electric Company� Greentech Mfg.� Northland Distributing & Manufacturing� Littlefork Medical Center� Good Samaritan Seniors Facility� Rainy Lake Medical Center� Essentia Health Clinic� United Health� Swanky Sweetpea� Littlefork Computer Repair & Mobile DJ� SoundNorth

� Randy Pozniak, CPA� True Star Credit Union� Bremer Bank� Border State Bank� Coca Cola Bottling� Island View Realty� Sandy Point Lodge� Days Inn� Rainy Lake Houseboats� Northstar Publishing� NORFAB aka Dynamic Homes� International BuildRite� Border Boxes� Bowman Construction� Up North Builders� Wagner Construction� Al Shannon Plumbing & Heating� CN Rail� MANNCO Trucking� Green Forest Inc.� New Gold Inc.

Interviews: Private Sector Representatives


� Koochiching County covers a total area of 3,154.02 square miles, of that 49.95 square miles are waterways. It is the second-largest county in Minnesota by land area and third-largest by total area.

� Over 10,000 years ago, a majority of Koochiching County was once underwater until a glacier receded. This accounts for the swampy conditions of the area and significant wetlands presence.

� Koochiching County has a total population of 13,311 residents. However, only 7,778 or 58% reside within the incorporated municipalities of Big Falls, International Falls, Littlefork, Mitzpah, Nett Lake, Northome and Ranier.

� The size of the area presents a significant challenge for doing demographic and economic analysis. This is common in small cities, towns, and rural places because of limited access to data sets. For example, robust income data sets are available annually through the American Community Survey, however the U.S. Census Bureau only publishes these data sets for places with populations of at least 65,000.

� The Nett Lake Indian Reservation is 138.9 square miles in the southeastern part of the county with a population of 101 residents.

Geographic Scope

Sources: US Census, 2010


� This largely rural community in Northeast Minnesota shares a border with Canada and has many unique characteristics that provide both opportunities and challenges.

• Border county, border city and border crossing

• Rainy River

• Rainy Lake

• Voyageurs National Park

• Koochiching State Forest

• Pine Island State Forest

• Other forested areas with public/private timber rights

• Lakes & wetlands

• Nett Lake Indian Reservation

• County seat, International Falls

• Small communities and “hamlets”

• Large hunting and fishing recreation areas

• Miles of trails crisscrossing the county for recreational use

Geographic Scope


� The map below shows Koochiching County and illustrates a 45-minute drive-time from the center of International Falls.

� Northome is located in Koochiching County and is a full 1.5 hours drive away from International Falls but only a 45-minute drive from Bemidji, in Beltrami County. It is easier for residents to shop, attend college and fly out of Bemidji.

� This “distance decay” is important to understand in terms of how costs and benefits are realized.

Geographic Scope


Typical Site Selection Criteria

Access & Logistics

Suppliers

Customers

Highways

Air Services

Sea Port

Rail

Human Resources

Availability

Competition

Skill/Quality

Labor Regulations

Turnover

Real Estate

Site/Building

Access

Utility Capacity

Environmental Conditions

Market Access

Cost

One Time

• Land Acquisition

• Construction

• Site Prep

• Infrastructure Improvements

• Capital Equipment

Recurring

• Labor

• Logistics

• Taxes

• Utilities

Incentives

Start - Up

• Site Improvements

• Grants & Taxes

• Utility Improvements

• Training

• Fast Track Permitting

Ongoing

• Tax Abatements

• Tax Credits

Site selection is driven by numerous factors and usually varies by project and industry. Community and economic development organizations can control or influence some of these factors. We recommend that a community focus on these controllable factors in their Economic Development Strategic Planning.


Site Selection Process Trends

Site selection is a process of elimination – not inclusion.The corporate site selection team seeks to eliminate weaker candidates as quickly as possible.

� The site selection process is full of complexities and nuances.

� Projects are always highly time sensitive.

� The decision making process is expected to be completed more quickly every year. Projects that used to take 18-24 months are now being completed in 9 months.

� Companies want to focus their limited time on candidates with the fewest flaws – those that best meet the critical decision drivers.

� With today’s technology and data availability, site selectors often know if a community will work or not for a client before they ever reach out to the community.

� Site selectors will sometimes conduct secret shopper experiments by probing a potential short-listed community prior to bringing their client to the area.

� Site selectors will verify the data you provide with their own research as well as on the ground research and interviews especially to flush out available workforce and employee skill sets.

Documents

2. Background, Objectives & Study Methodology · 2. Target Industry Analysis Identify industries for attraction, expansion, retention and small business growth based on the competitive