Welcome & Thank You Sponsors - BC Unlimited · A Presentation at the 2020 Economic Outlook . for Battle Creek Unlimited. Jim Robey, PhD. W.E. Upjohn Institute for Employment Research

Welcome & Thank You Sponsors

2020 ECONOMIC OUTLOOK

1

ECONOMIC DEVELOPMENTJoe Sobieralski, President & CEO

Battle Creek Unlimited

ECONOMIC TRENDS Jim Robey, Director

Regional Economic Planning ServicesW.E. Upjohn Institute for

Employment Research

CURRENT TRENDS/ECONOMIC DEVELOPMENT

Janet Ady, President & CEOAdy Advantage

Speakers

2


3


ECONOMIC TRENDS

Jim Robey, Director Regional Economic Planning Services

W.E. Upjohn Institute for Employment Research

A Presentation at the 2020 Economic Outlook for Battle Creek Unlimited

Jim Robey, PhDW.E. Upjohn Institute for Employment Research

February 18, 2020

Peering Into Economic Conditions:A Look at the Nation, the State, and the Battle Creek Region

2/18/2020

W.E. Upjohn Institute for Employment Research

The Institute is an activity of the W.E. Upjohn Unemployment Trustee Corporation, which was established in 1932 to administer a fund set aside by Dr. W.E. Upjohn, founder of the Upjohn Company.

MISSION:The W.E. Upjohn Institute for Employment Research is a private, nonprofit, nonpartisan, independent research organization devoted to investigating the causes and effects of unemployment, to identifying feasible methods of insuring against unemployment, and to devising ways and means of alleviating the distress and hardship caused by unemployment.

5

National Economy

2/18/2020

We are currently in the longest expansion since WWII

Source: Bureau of Labor Statistics Current Employment Survey 7

95

100

105

110

115

120

125

130

135Employment Index during Economic Expansion

1961-1969 (106 months)

1982-1990(92 months)

2001-2007(73 months)

1991-2001(120 months)

2009-present(128 months)

Mon

th o

f Bus

ines

s Cy

cle

Peak

= 1

00

3

4

5

6

7

8

9

10

20,00021,00022,00023,00024,00025,00026,00027,00028,00029,00030,000

Dow Jones Industrial Average

February 2020

05/03Unemployment rate falls to lowest level in 50 years

10/11Delay of Chinese tariff hike 01/29

USMCA signed into law

1/31Coronavirusdeclared public health emergency

12/12Phase 01 Trade Deal with China signed

The stock market reacted to various events last year, but continues to grow

February 2019

09/18Fed announces second round of rate cuts

08/01Fed announces first round of rate cuts

09/01Tariffs on Chinese goods go into effect

08/23China announcesincreased tariffs on U.S. imports

06/01China increases tariffs on U.S. goods

04/05Strong jobs numbers released

Unem

ploy

men

t Rat

e %

Source: Yahoo Finance & Bureau of Labor Statistics2/18/2020 Source: Yahoo Finance 8

2/18/2020

We’re in the longest business cycle (contraction and expansion) and the longest expansion, while experiencing the longest recession since measurement began

Source: National Bureau of Economic Research 9

Length of:1945-1948

1949-1953

1954-1957

1958-1960

1961-1969

1970-1973

1975-1980

1980-1981

1982-1990

1991-2001

2002-2007 2007-?

Contraction 8 11 10 8 10 11 16 6 16 8 8 18

Expansion 37 45 39 24 106 36 58 12 92 120 73 128Business Cycle 45 56 49 32 116 47 92 18 108 128 81 142

2/18/2020

GDP growth is projected to remain solid, although employment growth is slowing

Source: Bureau of Labor Statistics Current Employment Survey, Bureau of Economic Analysis, Philadelphia Federal Reserve

Consensus Forecast10

-400

-200

0

200

400

600

800

1,000

-2

-1

0

1

2

3

4

5

6

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Empl

oym

ent C

hang

e (0

00s)

GD

P Ch

ange

(% c

hg)

Gross Domestic Product and Employment Change

GDP Change (L) GDP Annual Avg. (L) Employment Change (R)

Forecast

2/18/2020

University of Michigan RSQE national forecast

11

2019 (Forecast)

2020(Forecast)

2021(Forecast)

GDP 2.3% 1.7% 1.7%

Employment 1.6% 1.3% 1.1%

Light Vehicle Sales (Millions) 17.0 16.8 16.7

Unemployment Rate 3.7% 3.5% 3.4%

Housing Starts (Millions) 1.25 1.26 1.28

CPI/Inflation 1.7% 1.7% 2.0%

2/18/2020

High and stable consumer confidence

Source: Conference Board and University of Michigan 12

0

20

40

60

80

100

120

140

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20190

20

40

60

80

100

120

140

Inde

x: 1

985

= 10

0

Consumer Confidence

Index of Consumer Confidence (CB) Index of Consumer Sentiment (UofM)

Inde

x: 1

966

= 10

0

Inde

x of

Con

sum

er C

onfid

ence

Inde

x of

Con

sum

er S

entim

ent

2/18/2020

Moody’s predictions of a recession are relatively low: 10% in November

Source: Moody’s Analytics 13

0

10

20

30

40

50

60

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Like

lihoo

d of

Rec

essi

on (%

)

Likelihood of Being in a Recession in the Next 6 Months

2/18/2020

Inflation and interest rates have increased in the past 2 years

Source: Bureau of Labor Statistics and New York Federal Reserve 14

-3-2-101234567

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Perc

ent (

%)

Interest Rates and 12-Month Inflation Change

3-month T-Bill 10-year T-Bill CPI-U 12-month change

The Next Recession: What We’re Watching

2/18/2020 16

What keeps economists up at night worrying about a recession?

• Trade wars (tariffs and taxes are the same—a cost to consumers)• Volatility of stock market• Low interest rates• Federal debt and deficits• Tax cuts• Politics• Global Pandemics

“Expansions don’t get tired; rather, they end due to

policy mistakes.”

Michigan

Michigan has seen declines in some key sectors of the economy

Construct.

Manufacturing Wholesale

Retail

Transport. and util.

Info.

Finance

Prof. and business Educational

srv.

Health care

Leisure and hospitality

Other services

Government

-10

-5

0

5

10

15

Empl

oym

ent C

hang

e (0

00s)

Michigan Employment Change, Q4 2018 to Q4 2019

Source: Bureau of Labor Statistics, Current Employment Statistics

2/18/2020

Light vehicle sales have been steady

Source: Bureau of Economic Analysis 19

02468

1012141618202224

Annu

al R

ate

of S

ales

(in

000,

000s

)

Annualized Rate of U.S. Light Vehicle Sales (in millions)

16.9 (2013 to 2020 Average)16.8 (2000 to 2007 Average)

2/18/2020

University of Michigan RSQE statewide forecast

20

2019 (Forecast)

2020(Forecast)

2021(Forecast)

Employment Change 23,300 (.99%) 29,000 (.64%) 25,900 (.42%)

Manufacturing Employment Change (Workers)

2,100 (.33%) 2,000 (.32%) 1,600 (.25%)

Unemployment Rate 4.1% 3.9% 3.7%

Labor Force Participation Rate 61.9% 61.7% 61.7%

Regional Conditions: Battle Creek MSA

The Battle Creek Metropolitan Statistical Area

• Calhoun County

Source: Basemap

2/18/2020

Unemployment rates are between 2.3% and 4.7% for counties in West Michigan

The MSA is at full employment

Michigan’s rate is 4.0% (November 2019)

Source: Bureau of Labor Statistics, U.S. Census Bureau 23

2/18/2020

The labor force participation rate in Calhoun countyis 58.5%

Michigan’s rate is 61.7% (November 2019)

Source: Bureau of Labor Statistics, U.S. Census Bureau 24

Total Employment in the MSA continues to be just above pre-recession levels

85

90

95

100

105

110

115

120

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Inde

x (2

007

= 10

0)

Nonfarm Employment Index (2007 = 100)

Battle Creek MSA Michigan United States

Source: Bureau of Labor Statistics Current Employment Statistics and Upjohn Institute

25

Battle Creek manufacturing growth is trending above the nation


26

60

70

80

90

100

110

120

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Inde

x (2

007

= 10

0)

Manufacturing Employment Index (2007 = 100)


Employment in services has held near pre-recession levels for the past seven years


27

85

90

95

100

105

110

115

120

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Inde

x (2

007

= 10

0)

Private Services Providing Employment Index (2007 = 100)


Overall, a greater proportion of the labor force in Battle Creek is employed than in the past

Source: Bureau of Labor Statistics Local Area Unemployment Statistics

28

0

10

20

30

40

50

60

70

80

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Employed Unemployed

Total Labor Force: Battle Creek Metro Area

Tota

l Lab

or F

orce

(in th

ousa

nds)

2/18/2020 Source: Federal Housing Finance Administration 29

Housing values continue to rise.

But the pace continues to decelerate nationally

New construction has remained relatively flat

Source: U.S. Census Building Permits

050

100150200250300350400450

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Perm

its

New Permits for Housing - Units

Battle Creek

Housing prices are rising more quickly than the State of Michigan

100

120

140

160

180

200

220

240

260

Inde

x (1

995

= 10

0)

Housing Price Index (1995=100)

Battle Creek Michigan United States

Source: Federal Housing Finance Agency

2/18/2020

There are concerns when housing costs exceed 30% of household income

American Community Survey (ACS) 5-year estimates (2018) 32

11.9 12.1 12.2 14.2 16.4 14.6 13.9

0

10

20

30

40

50

60

Muskegon Grand Rapids-Wyoming Niles-Benton Harbor Kalamazoo-Portage Battle Creek Michigan United States

Perc

ent o

f Hom

eow

ners

(%)

Percent of Homeowners Paying 30% or More

2/18/2020

Would more housing help?

American Community Survey (ACS) 5-year estimates (2018) 33

46.8 47.6 49 50.553.2

49.6 50.2

0

10

20

30

40

50

60

Grand Rapids-Wyoming

Kalamazoo-Portage Niles-Benton Harbor Battle Creek Muskegon Michigan United States

Perc

ent o

f Ren

ters

(%)

Percent of Renters Paying 30% or More

How did we do last year?

Review of last year’s forecast

0.0

0.8

-0.5

0.5

0.8 0.8

-0.1

1.2

-1.00

-0.50

0.00

0.50

1.00

1.50

Total Goods producing Service providing Government

Perc

ent c

hang

e in

em

ploy

men

t

Annual Percent Change in Employment

Current estimate Forecasted

Source: Bureau of Labor Statistics Current Employment Statistics & Upjohn Institute

Our View of 2020 & 2021

Battle Creek MSA 2020–2021 employment forecast

0.0

0.8

-0.5

0.50.4

-1.0

1.1

-0.5-0.4

-1.4

0.1

-0.9

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5


Perc

ent C

hang

e in

Em

ploy

men

t


2019 2020 2021

Source: Upjohn Institute, REMI, and Bureau of Labor Statistics

Battle Creek MSA, state, & national 2020 employment forecast

0.4

-1.0

1.1

-0.5

0.5

-0.9

1.0

-0.4

0.9

-0.3

1.2

0.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0


Perc

ent C

hang

e in

Em

ploy

men

t



Source: Upjohn Institute and REMI

REMI Battle Creek MSA 2020–2021 GRP forecast

3.5

2.7

4.2

2.63.2

2.4

3.9

1.9

3.02.4

3.6

2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0


Perc

ent C

hang

e in

GRP

Annual Percent Change in GRP

2019 2020 2021


Battle Creek MSA, state, & national 2020 GRP forecast

3.2

2.4

3.9

1.91.5

0.9

2.0

0.2

1.91.6

2.2

0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5


Perc

ent C

hang

e in

GRP

Annual Percent Change in GRP



2/18/2020

Questions?

• Jim Robey, PhD• Email: [email protected]• Phone: 269-343-5541

• Contributors• Kathleen Bolter, PhD, Regional Research Analyst• Gerrit Anderson, Mapping and Data Visualization Specialist• Emily Boyle, Project Coordinator / Copy Editor

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42


ECONOMIC DEVELOPMENT

Joe Sobieralski, President & CEOBattle Creek Unlimited

CURRENTACTIVITIES


43

Job Metrics

44

Calendar Year 2019

Jobs Created: 174

Capital Investment: $10,077,815


45

CURRENTFORT/AIRPORT

Airport Investment

WACO Aircraft CorporationInvestment: $18,000,000

80,000 sq. ft. hanger space30 Jobs Anticipated

Completion Date: June 2020


Airport Investment

WMU College of AviationInvestment: $24,000,000

60,000 sq. ft. space being added35 Jobs Anticipated

Completion Date: June 2020

46

CURRENTFORT/AIRPORT


47

CURRENTFORT/AIRPORT

FCIP Investment

DENSO North American Technical Training Center

Investment: $1,950,000Completion Date: June 2019


Foreign-Trade Zone 43Outreach Progress

• Refocused on scope expansion• Growth of existing Zones

• 4 new Zone sites in applicant/activation phase (6 more to meet Strategic Plan Goal)

• 5,890 jobs impacted• Additional prospects being pursued• 117 meetings, 61 companies

48

CURRENTFORT/AIRPORT


Downtown InvestmentBCU Grant: $38,000

MDARD Grant: $150,000MEDC Grant: $212,000

SnackwerksInvestment: $3,750,000

38 Jobs Anticipated

49

CURRENTDOWNTOWN



Rafaynee Southern Cuisine97 W. Michigan Avenue

50

CURRENTDOWNTOWN


Real Estate Improvement Fund

Grants Awarded to Date:$949,126

Four of nine projects announced • 7:1 ratio grant to other sources• 54,600 sq. ft. improved space• 122 jobs

All nine projects• 10:1 ratio grant to other sources• 124,500 sq. ft. improved space• 182 jobs

• Jay Andrew Development Co.• LKV Ventures, LLC• Umami Ramen, LLC• JPG Resources/Café Rica

51

CURRENTDOWNTOWN


Real Estate Improvement Fund REIF Grant: $250,000

Jay Andrew Development Co.103 W. Michigan AvenueInvestment: $3,800,000

Sq. Ft. Improvement: 34,00060 Jobs Anticipated

Phased redevelopment including roof repair, white-boxing the first floor, and affordable housing on the second floor. 52

CURRENTDOWNTOWN



LKV Ventures, LLC70 E. Michigan AvenueInvestment: $601,270


Affordable Housing:2nd & 3rd Floors2 1-bedroom apartments1 2-bedroom apartment

53

CURRENTDOWNTOWN



Umami Ramen, LLC215 W. Michigan Avenue

Investment: $805,000Sq. Ft. Improvement: 3,000

18 Jobs Anticipated

Restaurant relocation and building upgrades

54

CURRENT DOWNTOWN


Real Estate Improvement FundREIF Grant: $208,618

JPG Resources/Café Rica62 E. Michigan AvenueInvestment: $521,545


Café Rica opens in new location

February 29, 2020 Coffee shop & light food retailer; expanded menu to include craft beers, cocktails, and wine.

55

CURRENTDOWNTOWN


Downtown InvestmentThe Milton

25 W. Michigan AvenueInvestment: $34,000,000

85 apartments28 tenants leased

1 commercial tenant leased3-4 additional commercial tenants

considering

Residents have moved in 56

CURRENT DOWNTOWN


Pilot Real Estate Improvement Fund

Grants Awarded to Date:$500,000

• New Holland Brewery• Restore 269

Record Box Loft HandMap Brewing Collab BC

Two projects totaling:• 26,650 sq. ft. improved space• 74 jobs

57

CURRENTDOWNTOWN



Pilot REIF Grant: $265,000BCU Grant: $250,000

MEDC Grant: $968,500New Holland Brewery64 W. Michigan AvenueInvestment: $5,000,000


58

CURRENTDOWNTOWN



Pilot REIF Grant: $235,000MEDC Grant: $415,000

Restore 269/Record Box Loft15 Carlyle Street

Investment: $2,000,000Sq. Ft. Improvement: 13,150

10 Jobs Anticipated

59

CURRENTDOWNTOWN



HandMap Brewing15 Carlyle Street


12 Jobs Anticipated

60

CURRENTDOWNTOWN


Downtown InvestmentBCCF/BCU Grant: $30,000

Collab BC15 Carlyle Street


2 Jobs

61

CURRENTDOWNTOWN


FUTUREACTIVITIES


62

Project Triplet

63

FUTUREFORT/AIRPORT


Project Deep Dish

64

FUTUREFORT/AIRPORT


• Airport development - become a leading competitor in the UAV market

• BC’s advantage – airport land mass and financial/human resources

• Taskforce created • Feasibility study completed• Site visit Grand Sky Drone Park• Participated UAS Expo • Working with key stakeholders,

elected officials, and partners• Next step: review funding options

(bonds, etc.)

Battle Creek Delegationvisited Grand Sky Drone ParkGrand Forks, North Dakota

UAS/Drone Park

65

FUTUREFORT/AIRPORT


• Listing multiple BCTIFA parcels.

• Strong nationwide and international presence and significant support resources in industrial properties.

66

FUTUREFORT/AIRPORT


Real Estate Marketing Strategy


REIF Grant: $250,000(Committed)

Pending EDA Grant: $2,092,412Tiger Room Accelerator

30 W. Van Buren StreetInvestment: $4,184,825


67

FUTUREDOWNTOWN



REIF Grant: $250,000(Committed)

BCU Grant: $150,000(Committed)

Battle Rock Climbing Gym50 W. Michigan AvenueInvestment: $4,684,956


Year-round rock-climbing gym

68

FUTURE DOWNTOWN


BCU Investing $800,000 in 2020

99 W. Michigan Avenue 119-121 W. Michigan Avenue69

FUTUREDOWNTOWN


BCU-Owned Strategically Purchased Properties

70

FUTUREDOWNTOWN

85-87 W. Michigan Avenue17 W. Michigan Avenue


AFFORDABLE &WORKFORCE HOUSING

SOPHIA SQUAREHAMBLIN OPERA


71

AFFORDABLE &WORKFORCE HOUSING

AFFORDABLE DOWNTOWN BATTLE CREEK HOUSING OPTIONS FOR WORKERS, FAMILIES, AND SENIORS


72

Potential Development200 Capital Avenue SW

Blight Reduction/Redevelopment Ready

WKKF Grant: $1,643,000

Blight reduction by demolishing an unsafe building. This demolition will allow for new growth and investment in downtown Battle Creek.

73

FUTUREDOWNTOWN


Former Kmart property

74

STRATEGICPLAN

Mission: Build a strong community by driving strategic investment and job creation.

Vision: Engage the community to meet the opportunities and challenges of the future.

Our Commitment: By July 2023, BCU will generate a quarter of a billion in capital investment and 750 new jobs paying an average of $17 per hour with benefits. We will do this through retention, expansion, and attraction of targeted next-generation industries and talent.


75

STRATEGICPLAN

Community DevelopmentPLACEMAKING

Enhance the desirability of Battle Creek

TRANSPORTATION

Support equitable transportation

options

EDUCATION

Strengthen talent pipeline and connectivity

HOUSING

Support increase and variety of

housing options


INFRASTRUCTURE

Help develop assets for the next

generation

IMAGE & REPUTATION

Use positive media and communications to create a positive

narrative

ENTREPRENEURSHIP

Work with partners to establish strong

entrepreneurial services

DOWNTOWN

Increase the vibrancy of downtown

STRATEGICPLAN

76

TRANSFORMATIONAL COMMUNITY PROJECTS• Former Tree House Foods lot redevelopment • Kalamazoo River naturalization• Downtown building purchases and mixed-use redevelopment• Former Kmart redevelopment• Fountain/Division Streets (SEMCO) redevelopment • West End corridor property acquisitions and redevelopments/housing • Capital Avenue acquisitions/housing• Riverside Drive acquisitions/housing• Columbia Avenue corridor property acquisitions and redevelopments• Wayfinding/Welcoming signage • Dog parks/Parks • Beckley Road retail corridor redevelopment • Light rail/Transit


New Holland Brewing $250,000HandMap Brewing $200,000Rafaynee Southern Cuisine $ 50,000Aequitas Mobility Services $ 50,000Snackwerks $ 38,000Collab BC $ 30,000TOTAL $618,000

BCU Grants Awarded

77

STRATEGICPLAN


BCU Investments

78

STRATEGICPLAN


99 W. Michigan Avenue $ 550,00064 W. Michigan Avenue $ 300,000119-121 W. Michigan Avenue $ 300,00015 Carlyle Street $ 250,00085-87 W. Michigan Avenue $ 200,00017 W. Michigan Avenue $ 10,000TOTAL $1,610,000

The Milton (Heritage Tower) (MEDC $10,000,000Real Estate Improvement Fund

Match Grant (WKKF) $ 2,000,000Kmart Grant (WKKF) $ 1,643,000New Holland Brewery (MEDC) $ 968,500Pilot Real Estate Grant (WKKF) $ 500,000Tiger Room Accelerator

(Kellogg Company) $ 500,000Dennis Group (MEDC) $ 500,000Restore 269 (MEDC) $ 415,000Snackwerks (MEDC) $ 212,000continued on next page 79

Grants Received/Leveraged

STRATEGICPLAN


80

Grants Received/LeveragedDefense Industry Growth

Area Grant (MEDC) $ 150,000Snackwerks (MDARD) $ 150,000Tiger Room Accelerator (MDARD) $ 125,000Michigan Department of Talent

and Economic Workforce $ 115,300Site Readiness Grant Sackrider Farms (MEDC) $ 100,000Battle Creek Community Foundation Grant (BCCF)$ 30,000TOTAL $17,408,800Tiger Room (EDA) PENDING $ 2,000,000TOTAL $19,408,800

STRATEGICPLAN


Community Partners

81

STRATEGICPLAN


Joe:

• BCCHS Career Academy Council, Co-Chair

• BC Communication Coordination Collaboration

• BC Vision

• BC Rotary

• Calhoun County EDC, Vice Chair

• City of Battle Creek Planning Commission

• City of Battle Creek Economic Development Board

• Deal Team

• Harper Creek Optimist Club

Adam:

• City of Battle Creek Historic District Commission

Bridgette:

• BC Communication Coordination Collaboration

• BC HR Group

• BC Vision

• BCAMSC Policy Advisory Committee

• City of Battle Creek Technical Review Committee

• City of Battle Creek Wastewater Odor Smell Committee

• Grace Health Board

• Regional Prosperity Committee for Region 8

• Small Business Community Loan Grant Fund Committee

Brenda:

• City of Battle Creek Economic Development Board

Shabaka:• BCPS – Ford NGL Planning Committee• Battle Creek Promise Zone Authority

Board• BC Vision Workforce Development

Committee• City of Battle Creek Wastewater Odor

Smell Committee• IEDC Higher Education Committee• Manufacturing Consortium• Military Affairs Committee• US Global Leadership Council-

Michigan Advisory CommitteeRobert:• Japan America of Society – Chicago • Jet AA - Chicago• Downtown Parking Committee• KCC Advisory Committee• US Japan Council

STAFF COMMUNITY INVOLVEMENT


82

John Gallagher, Chair PresidentGallagher Uniform

Dave Powell, 1st Vice ChairDeanWestern Michigan University College of Aviation

Nate Darlington, 2nd Vice ChairDirector – BTL Aircraft ModificationsDuncan Aviation

Hugh Coward, TreasurerWest Michigan Field RepresentativeMichigan State Building and Construction TradesPresidentWest Michigan Construction Alliance

Karen Boyer, Secretary Retired – VP/General Admin DENSO Manufacturing Michigan, Inc.

Kris BahnerSenior Vice President of Global Corporate AffairsKellogg Company

Adrien Bennings, Ph.D.PresidentKellogg Community College

Rebecca FleuryCity ManagerCity of Battle Creek

Stacey HamlinCEOCTS Telecom, Inc.

Drew SchweitzerPresident, CEOSchweitzer, Inc.

Jim ShollChairmanDirect Investment Fund Committee

Andris StaltmanisTAC Business Leader DENSO Manufacturing Michigan, Inc.

Erick StewartCEO/PresidentSTEWART Industries, LLC.Chairman, Battle Creek Tax Increment Finance Authority

Sara WallacePresident & CEOThe Miller Foundation

Joel WittenbergVice President & Chief Investment Officer, W. K. Kellogg Foundation

EX-OFFICIO MEMBERS:

Joe SobieralskiPresident & CEOBattle Creek Unlimited, Inc.

Mark A. BehnkeMayorCity of Battle Creek

Albert BobrofskyFormer ChairmanBattle Creek Tax Increment Finance Authority

Joe Schwarz, M.D.Retired Congressman

83

BCU BOARD OF DIRECTORS


CURRENT TRENDS/ECONOMIC DEVELOPMENT

Janet Ady, President & CEOAdy Advantage

84


© 2017 www.adyadvantage.com

STRATEGY MATTERS

Economic Growth and Diversification circa 2020Battle Creek Unlimited Annual Meeting

February 18, 2020


TODAY’S AGENDA

© 2017 www.adyadvantage.com© 2020 www.AdyAdvantage.com

TODAY’S AGENDAWhat to expect

• Why and how the economic development world has changed

• What it means for EDOs and the communities they serve

• Some ideas of what to be thinking about next!

Note: “EDO” = Economic Development Organization


ABOUT ADY ADVANTAGE


OUR SWEET SPOT

© 2020 www.AdyAdvantage.com

Economic Development Organizations

Understand a region’s and community’s economic assets

Businesses

Understand what makes business

competitive


THE ADY ADVANTAGE ECOSYSTEM


Site Selector’s Perspective

Community’sPerspective


ADY ADVANTAGE AREAS OF EXPERTISEIssues We Help EDOs Address



ADY ADVANTAGE AREAS OF EXPERTISERepresentative Clients



TRADITIONAL E.D.:THE SITE SELECTION PROCESS &KEY EDO SUCCESS FACTORS


ECONOMIC DEVELOPMENT TODAY


SPOILER ALERT!


TRADTIONAL ECONOMIC DEVELOPMENT


The Site Selection Process


THREE ECONOMIC DEVELOPMENT MEGATRENDSSummary

MEGATREND IMPLICATION

Minimizing Risk AlignmentReadiness

ED Ecosystems Regionalism

Increasing Competitiveness Differentiation



“Just bring us qualified candidates, and we’ll take it from there!”


ECONOMIC DEVELOPMENT REIMAGINED


ECONOMIC DEVELOPMENT REDEFINEDAccess to Talent


The availability of talent has become the most important location criterion for site selectors and companies.

© 2020 Ady Advantage


ECONOMIC DEVELOPMENT REDEFINED


Talent Framework


ECONOMIC DEVELOPMENT REDEFINEDLessons Learned on Talent


1. Not unique to Battle Creek.

2. Not a single “Talent Issue” but a combination of “talent issues.”

3. Solutions are unique because each community has its own unique assets and goals.

4. Root causes.

5. Conventional wisdom is only half right.

and…..


6. There is no one left to point fingers at. And no time to do so.

ECONOMIC DEVELOPMENT REDEFINEDLessons Learned on Talent


ECONOMIC DEVELOPMENT REIMAGINEDFactors Impacting the Location Decision Process




ECONOMIC DEVELOPMENT REDEFINEDBiggest Barriers to Talent Retention and Recruitment


• Housing

• Transportation

• Child-care

• Broadband

• Drugs


ECONOMIC DEVELOPMENT REDEFINEDAutomation and AI


Source: McKinsey Global Institute, A Future That Works: Automation, Employment, and Productivity.

https://www.mckinsey.com/%7E/media/mckinsey/featured%20insights/Digital%20Disruption/Harnessing%20automation%20for%20a%20future%20that%20works/MGI-A-future-that-works-Executive-summary.ashx


ECONOMIC DEVELOPMENT REDEFINEDAutomation and AI


Source: McKinsey Global Institute, A Future That Works: Automation, Employment, and Productivity.

https://www.mckinsey.com/%7E/media/mckinsey/featured%20insights/Digital%20Disruption/Harnessing%20automation%20for%20a%20future%20that%20works/MGI-A-future-that-works-Executive-summary.ashx


ECONOMIC DEVELOPMENT REIMAGINEDQuality of Place’s Role in Business Development



PARTING THOUGHTS


ECONOMIC DEVELOPMENT REIMAGINED


Impact on EDOs

Implication #1: A New “Three Legs of the Stool” of Economic Development.EDOs need to intentionally structure their programs around talent development and placemaking as well as traditional business development.


The New “Three Legs of the Stool”







Impact on EDOs

Implication #2: The Need for Economic Development Ecosystems.EDOs must coordinate an ecosystem of strategies to grow and diversify their economies.

Success is predicated on:

• Greater community engagement

• Agreement on shared goals

• Ability to align organizations and resources to achieve those shared goals





Impact on EDOs

Implication #3: Talent Development and Business Development should both be considered as areas to include in your plan and programs. Increasingly, EDOs are dedicating a greater share of their resources to talent programs; these should be reflected in their goals and strategies rather than just appended to traditional business development framework.

Success is predicated on:• Intentionality of talent programs

• Coordination of talent programs with business development programs





Impact on EDOs

Implication #4: EDOs have a stake in placemaking and “place managing”… but it may be as a convener rather than as a “doer.” EDOs can bring perspective and relationships across organizations to help create or improve a sense of place.

Success is predicated on:

• Being able to help understand what elements of quality of place to focus on and in what order to make their community’s true brand shine.

• Being able to coordinate with communities and others to implement the strategies




Impact on EDOsPlacemaking defined:





Impact on EDOs

Implication #5: Key Success Factors.Readiness, differentiation, and alignment are still the relevant success factors for ECOs, but the definition of each has expanded tremendously to reflect the importance of talent and placemaking in addition to business development.

Traditional Current/Future

Readiness

Site Readiness Site Readiness Talent ReadinessEntrepreneurship and InnovationCommunity Readiness (Placemaking)Organizational Development

Marketing/Differentiation

Business retention, expansion and recruitment

Business retention, expansion and recruitmentTalent retention, development and recruitmentPlacemaking to support the above

Alignment/Stakeholder Engagement

E.D. universe (education, workforce, employers, elected officials)

E.D. universe (education, workforce, employers, elected officials)Players who touch on talent (Chamber, Tourism, new employer-led coalitions, etc.)

Key EDO Success Factors






Impact on EDOs

Implication #6: Key Performance Metrics.The legacy metrics for EDO performance are still relevant, but insufficient to capture the role of economic development, especially at a time when talent is in such scarcity. A new slate of metrics narrows in on specific jobs/wages and adds economic mobility and equity as additional indicators.

Traditional Current/Future

Performance Metrics

InvestmentJobs

Investment Jobs – targeted to region’s needsEconomic mobility Economic equity

Key EDO Performance Metrics



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Midwest Talent Strategy InnovationPublished July 2019

Talent Toolbox for Economic DevelopersPublished February 2016

Rural Economic Development ToolboxPublished September 2014

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Welcome & Thank You Sponsors - BC Unlimited · A Presentation at the 2020 Economic Outlook . for Battle Creek Unlimited. Jim Robey, PhD. W.E. Upjohn Institute for Employment Research