CINCINNATI -- The Cincinnati USA Partnership is asking Tri-State companies to pledge $10.5 million dollars to fund its operations for the next three years, but some recent economic reports and rankings may make that challenging.
The partnership is the economic development arm of Cincinnati USA Regional Chamber. It is the largest corporate recruiter in the region. It typically gets about 80 percent of its funding from private companies and 20 percent from local governments.
Tax records show the chamber spent $6.1 million in 2011 on services traditionally covered by the partnership. Those services include economic development recruitment, the Consumer Marketing Hub initiative, the Minority Business Accelerator and the Cincy Tech startup initiative.
Documents on the chamber's web site show the partnership is in the final year of a five-year funding cycle in which investors were asked to cover operating budgets of $6.5 million per year.
The new chamber goals are $3 million for 2014, $3.5 million in 2015 and $4 million for 2016. Chamber spokesman Lance Barry said the goals would be "ambitious but obtainable" when asked about the campaign last week. The partnership's interim director expressed optimism that goals would be met, but didn't give any hint of a downsized campaign.
“No sell is an easy sell. That’s for sure,” said Matt Davis, the partnership’s interim executive director. “But I think we’ll certainly be able to show the return on investment that our past investors have gotten and show why they should invest in this going forward.”
The partnership has closed 57 development deals in the last 19 months that resulted in 12,170 new and retained jobs. It was involved in projects that generated $441 million in new capital investments and $964 million in total regional payroll.
Its biggest recent win was the June recruitment of automotive technology supplier Festo U.S. to Mason. The Long Island company will invest $50 million and hire 250 people here by 2015. Rivals in Georgia, Michigan and North Carolina competed for the project, making it a solid win for the partnership.
Another win: Site Selection magazine in March ranked the partnership as the nation’s sixth best economic development agency, based on its 2011 performance. It’s the tenth time in a decade that the magazine has ranked the partnership in its top 10.
Reports: Partnership Lagging
But there are other numbers that don’t look so good for the partnership.
The most recent quarterly report from JobsOhio showed the partnership ranked last in Ohio in new capital investment in the 12 months ending April 30. The partnership is one of six network partners in the JobsOhio system , a public-private partnership that lines up incentives for corporate expansion projects.
Cincinnati has the smallest geographic footprint of Ohio's network partners, with five counties, compared to 11 for Columbus 2020 and 18 for Team NEO in Cleveland.
But its tally on capital investment in the first quarter - $288 million - was less than one third that of network partners in Cleveland, Columbus and Nelsonville, where the 25-county Appalachian Partnership for Economic Growth is based.
The partnership ranked third in the same report for new jobs created on a trailing 12-month basis.
Another JobsOhio report shows the Cincinnati USA Partnership ranked fifth among six network partners based on its more than a dozen performance indicators in the second half of 2012.
The “Network Rankings” report is not typically shared with the public, but WCPO obtained a copy.
JobsOhio did not return calls about the document. Chamber spokesman Lance Barry said it represents “a very brief snapshot in time,” but he did not otherwise challenge the accuracy of the data or provide other reports showing how the partnership performed over longer periods of time.
The report ranks six JobsOhio network partners on 11 objective metrics and six subjective measures. The Cincinnati partnership ranked fifth in new jobs created, jobs retained, retained payroll and new capital investment. It ranked second in new payroll created and third in total projects won without incentives.
The JobsOhio ranking was so surprisingly low that local economic development officials circulated the report among themselves earlier this year.
Could it hamper the partnership's fundraising efforts?
“It doesn’t sound good. Assuming the rankings are objective, yeah, it means something,” said Joe
Kramer, who ran the partnership in the 1990s before becoming an executive vice president and commercial real estate broker for Henkle Schueler & Associates. Kramer said the partnership might be struggling with its new role as the Cincinnati office of a statewide economic development initiative. But he also thinks the JobsOhio structure is working well in Southwest Ohio.
“They do seem to be making decisions quicker than in the past,” he said. “It does seem like there are some projects in the pipeline right now. If those come to fruition they will certainly help the region’s performance.”
Will High Turnover Hurt?
Another issue that might concern partnership investors is turnover. Davis is the fourth person in three years to take the helm and all seven of its business attraction specialists have been with the partnership for less than two years.
Davis’ hiring comes at a time of transition for the partnership’s parent organization. Chamber CEO Ellen Van der Horst announced in May that she will not renew her contract when it expires early next year. A search is underway for her replacement. Denyse Ferguson, who was recruited from Michigan to lead the partnership in 2011, announced her resignation August 26. She has yet to leave the chamber or explain why she is resigning.
Neil Hensley left the chamber after 22 years to become economic development director for the city of Blue Ash last September. Jessica Michaels Johnson had ten years at the chamber before leaving to start her own consulting firm last October.
Across the river, at Northern Kentucky’s Tri-ED agency, CEO Dan Tobergte is four months into his 23rd year. His staff includes Karen Finan, who will start her ninth year at Tri-ED in March, and Casey Barach, six years into his role as vice president of entrepreneurship.
“I would think at this point, given all the people they’ve lost, there is at minimum a reorganization job that needs to be done,” Kramer said.
Davis said employee turnover is to be expected because the partnership implemented a new cluster-based economic development strategy that puts specialists in charge of key economic sectors: Advanced energy, biohealth, consumer products and brand development, advanced manufacturing and finance, insurance and IT.
“Yes, we’ve recruited a new team, a different team, but they’re being recruited to execute the new strategy that was put in place around that same time two years ago,” Davis said. “Again, I’ll point to the success over the last 19 months: 57 projects, over 1,200 new and retained jobs and $441 million in new capital investments.”
“The partnership is absolutely on the right track,'' he said. "We’re showing results. We’re providing a high return on investment for those who invest in the work. So, my job is going to be to make sure that we continue that momentum.”