Clark Krause didn’t need to seek bids to hire his top choice to sell Boise to out-of-state companies.
He turned to the guy who he says helped him bring an estimated 14,000 jobs to New Mexico over six years.
Krause, who took over as director of the Boise Valley Economic Partnership on Sept. 13, hired Jack Allston, principal at Rio Rancho, N.M.-based JBA & Associates, for $63,000 – one of his first tactical moves on the job.
That includes $15,000 for a study that Allston, a site search consultant with 30 years of experience, has already completed and $48,000 for ongoing work over the next year.
The two worked together in Krause’s previous job as head of the state-funded New Mexico Partnership to arrange 200 annual visits to companies around the country. The work included cold calling executives, arranging one-on-one meetings and building relationships over a number of years. Krause said he was paying Allston about $90,000 annually in New Mexico.
Charges of cronyism don’t worry Krause, who said he had originally hired Allston – then based in Pennsylvania – because of his national reputation.
“I’m unapologetic about that one,” he said. “There are only a few people in the country that can do what he does. … He’s tried and true. Frankly, I’d pay him double that amount if I could.”
Spending at BVEP, the Boise Metro Chamber of Commerce‘s economic development arm, can sometimes draw sharp scrutiny because the group has received money from local governments, including Boise, Meridian, Garden City and Ada County. Boise alone contributed $300,000 to the group’s first five-year, $5 million campaign.
The campaign fell far short of donors’ goals of creating 11,000 jobs. BVEP’s latest estimate is that it helped attract companies that brought 2,738 jobs to Idaho between 2006 and 2010. Donations also fell short at just over $4 million.
Bill Connors, president and CEO of the chamber, acknowledged that the study might have been done locally, but he said it’s only small piece of the specialized work that Allston will be doing. He said he trusts Krause to hire the right people to start getting results for BVEP donors.
“We hired Clark for his expertise and his connection to expertise, and there’s a proven record there,” Connors said. “And if that’s the guy he wants making cold calls, that’s the right guy.”
Elizabeth Fredericksen, who consults with non-profits, government agencies and businesses about ethics, said a consulting contract with a business associate may not cross any legal or procedural lines at a group like the Chamber, which straddles both business and non-profit cultures. But there may be a “public perception” problem, particularly with so many Idahoans out of work, she said.
“It’s always unfortunate when in this community we don’t take advantage of the talent that can be pooled between the university and the business community to accomplish these same goals,” said Fredericksen, associate professor of public policy at Boise State University.
Krause will be trying to carry out BVEP’s new business recruitment strategy, which was crafted after more than a year of consultation with donors. BVEP’s previous director, Paul Hiller, retired in March.
The group will focus less on building national awareness of Boise through advertisements and news stories and more on arranging face-to-face meetings with people who actually decide to move companies.
The chamber will launch the new five-year, $4 million campaign in March.
Krause’s main pitch will be to visit at least 100 companies in six targeted industry clusters around the country annually. The trips will cost $3,000 to $5,000 each.
He said most economic development groups wait for companies to come to them before they start wooing, but he said the only strategy that seems to convince companies to consider an overlooked city or region is to build relationships over a number of years.
Krause estimated that more than 10 percent of the 14,000-plus jobs he helped attract to New Mexico came from companies whose interest in the state was initially sparked by similar visits. One example is PreCheck Inc., which brought 200-plus jobs in 2006 and later moved its headquarters to the state, he said.