Members of the Manhattan business community talked about the future of economic development in the city at Tuesday’s Manhattan City Commission work session.
The discussion followed a presentation on the annual economic development report. The city performs an accountability review of all organizations which receive Manhattan Economic Development Opportunity funds — including recipients of funds from the 1994 half-cent city-wide MEDOFAB sales tax as well as the half-cent RICOED Riley County Roads and Jobs sales tax from 2002 and its renewal in 2012.
According to their report, economic development funds contributed toward the creation of 1463 jobs since the city’s first eco-devo agreement nearly 25 years ago. City Manager Ron Fehr writes that is 2 percent higher than the job growth that was projected. Additionally, Fehr writes that “for every $1 invested in economic development initiatives since 1995, approximately $9.36 was leveraged in private sector and other investments” and that 15 infrastructure projects have been funded through the fund.
Multiple companies that received funds have managed to meet targeted capital investments, job creation as well as wage structure and employee benefits. Companies that have lagged just below 100 percent compliance are Continental Mills, which created 10 of the targeted 12 jobs, GTM Sportswear, which created 479 of the targeted 641 jobs, Flint Hills Beverage, which created 23 of the targeted 24.5 jobs, and Tallgrass Brewing Company, which created 4 of the targeted 16 jobs. Those companies met or exceeded all other performance requirements set down in their agreement with the city.
Manhattan Area Chamber of Commerce President and CEO Lyle Butler and Knowledge Based Economic Development (KBED) Director Rebecca Robinson and others spoke about the success Manhattan has had in recent history in terms of eco-devo, but also warned that they need to be aware of the changes in the economy.
Chamber Economic Development Director Trent Armbrust says that those changes will make eco-devo not equitable for all cities and will result in some communities losing the growth game, so-to-speak. Armbrust says as communities approach full employment, competition to attract world-class talent will heat up and pose significant challenges for future economic growth.
“I call it a labor-induced recession right now in Manhattan — we have over 1,000 empty jobs,” says Armbrust. “We’re not growing because we don’t have the labor. So it’s time we’ve talked about it, but it’s also time to have some priority changes and develop some solutions.”
Armbrust highlighted a few specific challenges facing Manhattan, including increasing and improving start-up tools and support services to improve the entrepreneurial ecosystem as well as improving talent development, retention and attraction. Another challenge he mentioned was increasing the diversity in the business sphere.
“It’s been proven over and over and over — companies and communities that embrace a diverse population and promote minority-owned businesses grow at a higher rate,” says Armbrust. “And they have a more robust community and a more robust economy.”
Mayor Pro Tempore Usha Reddi says part of the process to promoting minority-owned businesses will require that boards hire more minorities.
“All the boards I look at, wherever I go, I shouldn’t be the only minority woman — I cannot speak for every non-white person all the time,” Reddi says. “That can’t be the representation, for that to change you need to go to them, they’re not going to come to you.”
Some strategies Armbrust pointed to to help would be to pool more community resources across organizational boundaries to help assist with new developments, promoting innovation districts in the community and programs to help foster start-up growth as well as minority-owned businesses. He says they’ll be back before the commission with a more comprehensive list of strategies at a later date.
KSU Institute for Commercialization President Kent Glasscock says that the world economy demands communities be more aggressive and innovative in building prosperity. Glasscock says that to strive to be just “pretty good” is a road to economic mediocrity.
He pointed to three things Manhattan needs to do to stay on the road toward future prosperity including transforming economic development strategies based on how the economy and workforce are changing, continue to keep a regional perspective by working with Region Reimagined, as well as to renew the Eco-Devo sales tax.
“We’ve had great success and we’re going to have a great story for that renewal,” says Glasscock. “But this body is going to be the one that decides when and how that sales tax renewal will be put before the voters of this community and/or the county.”
Commissioner Wynn Butler says he’s all for renewing it as soon as possible, but also proposed restructuring the tax to be city-wide in order to cover the Pottawatomie County side of the city.
“Because we have all those business there and that will substantially change the amount of money that would be available for various projects,” Butler says. “I really think we need to get going on that, that’s something we can concrete do right now that will impact all the vision that everybody has.”
City Manager Ron Fehr says the earliest they’d probably be able to get the renewal on the ballot is 2020.