Tri-State leaders set their sights on super-sizing foreign investment

Tri-State leaders set their sights on super-sizing foreign investment
Posted at 11:00 AM, Jul 05, 2017
and last updated 2017-07-06 04:54:28-04

CINCINNATI -- The Tri-State is no stranger to foreign investment, with more than 450 foreign firms employing 50,000 workers here.

But a coalition of government and business leaders say that critical mass of direct foreign investment only means that the region is poised for even larger growth of bringing talent and jobs if they continue working in unison.

"The leads that we are getting now are bigger and better leads. They're strong companies that are looking at Cincinnati," James Flick, Cincinnati development officer, said.

Cincinnati Economic Development Director Oscar Bedolla said the city wants to build on some very good development years -- $447 million in development investment and 2,347 jobs in 2016 alone -- with increased focus on luring more foreign direct investment. 

To that end, the city hosted a symposium at the end of March that brought together a range of foreign business, government and local business leaders. A report and a comprehensive resource list are getting their finishing touches for a public release. 

Learning to work together

The growth was a long time coming, starting with a major push in the 1980s to lure Japanese automotive suppliers to the Tri-State, sparked by Cincinnati's location in between the then-new Honda plant in Marysville, Ohio, then the new Toyota plant in Georgetown.

Government and chamber officials, including Neil Hensley at Cincinnati USA Chamber of Commerce at the time, made dozens of trips to Japan to court companies. It worked, with more than 100 Japanese-owned firms now thriving here.

Blue Ash Economic Development Director Neil Hensley

"A lot of the smaller suppliers realized there wasn't going to be enough business if they were only trying to sell to one of those two if they located really close to Marysville or Georgetown," said Hensley, who is now Blue Ash economic development director.

The next wave was from Germany and France, which led a charge of European companies setting up shop. Now, more than 200 European companies with more than 32,000 workers are in the Tri-State.

Tri-State leaders have talked the talk of regional cooperation for decades, though the results have been varied, with corporate headquarters being poached from one state or county to another and governors, at times, unabashedly seeking interstate moves.

But a host of public and private leaders agree that the talk has turned into action in recent years, punctuated by the success of Regional Economic Development Initiative, or REDI Cincinnati, in scouring the globe for new investment.

REDI represents 15 counties in Ohio, Kentucky and Indiana, aggressively marketing the region first and handing off specific locations to Port of Greater Cincinnati and local governments later.

"Our philosophy is we unite the region to compete globally. We believe that the only way to compete globally is working together," REDI President and CEO Johnna Reeder said.

REDI Cincinnati President and CEO Johnna Reeder

REDI spends more than half its annual budget flying delegations across the globe to sell the Tri-State's assets with personal contact.

"Internationally, there's a lot of face time (literal face time, not the Apple app). And showing you're commitment to your region is hard to do over the phone," she said.

REDI led a mission to Brazil in November, one that was attended by leaders from Greater Cincinnati and Dayton. That's a first in the memory of Joseph Dehner, chairman of Frost Brown Todd's international practice and a 30-year veteran of international law.

It made sense, he said, to tout the combined assets of aerospace powerhouses like Wright-Patterson Air Force Base and General Electric's jet engine plant in Evendale, as well as the two cities' collective auto manufacturing prowess.

As a result, a delegation of Brazilian automotive and aerospace manufacturers looking to diversify into the U.S. visited Cincinnati last week.

"It's such an opportunity for Brazilian companies," Reeder said. Aerospace supply companies that cater to Brazil's Embraer can set up shop in Greater Cincinnati to diversify into supplying General Electric, Boeing and Airbus, she said.

Brazil's economy has been in tumult in recent years after a rapid expansion, which is all the more reason to diversify into the United States, Reeder said.

In addition to Brazil, REDI is focused on four other countries in particular: Germany, Japan, India and Israel.

That focus has paid off in Blue Ash, which was chosen by India's IT giant Tech Mahindra for a delivery center in 2016, with plans to eventually hire 85 high-salaried employees.

REDI traveled to India three times before Tech Mahindra chose Blue Ash over competitors throughout the country.

Hensley, Blue Ash's economic development director, was part of the delegation.

Blue Ash has developed into a hotbed for IT companies, and international trips have borne fruit. The European-American Chamber of Commerce of Greater Cincinnati suggested that REDI detour from its concentration on larger markets to visit Finland, which it has done twice in the last several years.

Now, three Finnish companies which previously had little or no knowledge of Ohio have set up shop in Blue Ash.

Hensley has the unusual perspective of someone who represented the region focusing for years on international development at Cincinnati USA Chamber of Commerce and now focusing on one city.

While he has to advocate for Blue Ash when it comes time for foreign companies to decide where in the Tri-State to locate, he begins the process as a cheerleader for the whole region.

"When I do travel with REDI, I go as a representative of 15 counties. It doesn't make sense to pitch one city or county," Hensley said.

He added that they get his name on his card and he can work from there to sell Blue Ash's strengths. 

Tag Team

It didn't happen overnight, but Greater Cincinnati has distributed responsibilities among a few key organizations to prevent duplication and wasted time.

While REDI works to lure companies to the Tri-State and keep them here for expansions, the Port Authority of Greater Cincinnatiis charged with buying, clearing and marketing specific sites for businesses to use.

Currently, it's focused on two big ones -- the former Gibson Greeting Cards complex in Amberley Village, and Cincinnati Gardens -- which total 75 acres.

"That's where our strategy complements what REDI is doing," Laura Brunner, the Port's president and CEO, said. "To have them come even look, we need to have choices for them that are ready to go."

Port Authority of Greater Cincinnati President and CEO Laura Brunner

The Amberley industrial park has been cleared and is going to be put on the market soon, Brunner said. And Cincinnati city council's approval to match a $1 million demolition grant for Cincinnati Gardens means the port is writing the specifications to ask for demolition bids.

"We really are excited about the opportunity," Brunner said. "We do believe that we have the essential components to attract manufacturers with high-paying jobs."

The 54-acre Amberley site is the largest ready-to-go industrial site within the Interstate 275 loop, she said, but it represents a small percentage of thousands of other acres that the port hasn't had the resources to prepare for redevelopment.

The time is ripe, she said, because of the recent shifts companies have taken toward wanting to do business in urban areas and less so in green fields far into the suburbs.

What are the barriers to more growth? "It is just so simple. More money. We've identified the sites that are attractive, we know how to do the work, we have the contractors, the market studies, the consultants," Brunner said. "All we need is the money to market it happen from all levels of government -- city, county and state."

Huge progress but more opportunities unrealized 

Joe Dehner grew up in Cincinnati and returned to practice law in 1975. He didn't focus on international trade because there was so little being done in the era of The Big Red Machine.

He has seen that change dramatically over the years, becoming a globalized city with huge investment by Japan, Germany, France and others.

"The lesser stories are the literally hundreds of small to midsize businesses. Why do they come here? They make good products and provide good services in their home country. And we're easy to get started in," he said. "That's the untold story."

Dehner said that Greater Cincinnati is doing well competing with other U.S. metropolitan areas for direct foreign investment, but he said European cities are outperforming us. He cited Dusseldorf, Germany -- which is only slightly bigger than Cincinnati -- employing 14 full-time workers dedicated to luring foreign investment.

"Ask yourself why Germany has a large trade surplus with the world and the US has the opposite," Dehner said. "Germany has higher wages and national health insurance. Germany is deliberately global. We need to be."

He said REDI, the Port Authority and government leaders like Cincinnati Economic Development Director Bedolla are doing a very good job but with fewer resources than their European counterparts.

"Europe does a lot better," he said. "We're too parochial, and we could do a lot better."

Bob Driehaus covers economic development. Contact him and follow stories on Facebook, Google, and Twitter.