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What’s the holdup, BVEP?

Anne-Allen_White-Bckgrnd_WEBA lot of good news has come out of Twin Falls lately. A 1 million-square-foot Chobani yogurt plant opened last year, and Glanbia Foods, the largest maker of American cheese in the country, opened its corporate headquarters there this summer.

In August, McCain Foods in Burley announced a $100 million expansion. The Portuguese Frulact Group announced in mid-October it’s building a factory in Rupert that will employ 250 people, and Clif Bar the next day said it will build a $90 million, 300,000-square-foot factory in Twin Falls.

When I called him about the latest announcement, Twin Falls Chamber of Commerce President and CEO Shawn Barigar said, “We’re sort of getting used to the good news.”

I asked Barigar why large manufacturing companies are moving to the Magic Valley. The modest Barigar said he didn’t know all the reasons, but added that the area’s economic development people do make a point of working together with the chambers and urban renewal agencies in surrounding communities.

“We all get to the table, honestly checking our egos at the door, and when we get questions from companies about their desire to move here, the answer is ‘Yes,’” Barigar said. “And then we find out what the question is.”

The Magic Valley is an important agricultural production area, and it’s the center of Idaho’s dairy industry. That makes it a solid fit for Glanbia and Chobani, which rely on access to milk. Clif Bar has talked about using local fruit, Barigar said.

But the Treasure Valley is no agricultural slouch. The valley has strong, established agricultural operations such as Amalgamated Sugar’s huge plant in Nampa. The J. R. Simplot Company is opening a new, 380,000-square-foot plant in Caldwell next year. The Treasure Valley, too, would be a good fit for a new food-product manufacturer.

But so far the region’s economic development organization, The Boise Valley Economic Partnership, hasn’t attracted any large manufacturing companies like the ones setting up shop in Twin Falls. In fact, Meridian firearms and accessories manufacturer ATK just announced it’s moving 64 jobs out of Idaho.

BVEP Executive Director Clark Krause said the three-person BVEP, a division of the Boise Metro Chamber of Commerce, has been on 25 trade missions, including trade shows, since 2011. BVEP has had 54 site visits in the valley since then, he said, with 273 face-to-face meetings.

That’s a lot of work, but there’s little to show for it. Mike Mullis, the site selector who helped bring Clif Bar and Twin Falls together, has some theories that could help.

Mullis’ Tennessee-based site-selection company, J.M. Mullis, helps about 60 projects per year find locations. He has visited the Treasure Valley many times with prospective companies, including Clif Bar, which looked at the area before choosing Twin Falls.

Mullis calls himself a strong supporter of Idaho and says the Boise area has a lot of things going for it. He likes the workforce; he has interviewed executives with local companies, and says he’s confident Idaho workers are hardworking and reliable. He has high praise for Gov. C.L. “Butch” Otter and Lt. Gov. Brad Little and the expertise they’ve brought to negotiations in the past.

But Mullis said the Boise area doesn’t have industrial tracts that are zoned and serviced and ready for use, and that’s what his projects need. The executives of the companies he represents move fast, and that means local leaders must have answers available when Mullis’ team comes in.

“It’s not the lack of desire on the standpoint of the local leadership, because they’re very desirous,” he said. “BVEP is a sharp organization. They’re good people. But they haven’t had the training in many instances to have a full understanding of the labor market, a full understanding of the infrastructure, a full understanding of the real estate, that they can use to react quickly with people like me.”

Mullis was talking to me from the Minneapolis/St. Paul area, where he had two meetings in one day scheduled with communities vying for major projects.

“Those communities have done their homework,” he said. “They will be able to talk about anything I want to talk about in these two-hour meetings, such as labor, infrastructure, incentives, real estate. They’ve already got the site identified in each city, so when I conclude those meetings, I’ll have a real good idea of what our sense of direction will be. Otherwise, you will have looked, the community wasn’t prepared, and you had to move on.”

Mullis tried to be careful not to point fingers at BVEP. At first, he said the lack of preparedness is not the fault of BVEP, but then he said the group must do a better job of working with local officials to lay the groundwork for a successful pitch. He’s also a strong advocate for tax increment financing, which Twin Falls used for Chobani and Clif Bar. Because Idaho doesn’t have many other types of incentives to lure prospects, he said, TIFs are key. Yet, he said, he hears of the strong opposition to TIFs from some Idaho leaders.

“It’s the one tool Idaho has, the one incentive-related tool,” he said. “You can reduce the front-end cost of the project and get it within a reliable spending limit.”

Krause, of BVEP, countered that his organization responds to requests for information as quickly as any other economic development group in the country. And he noted that Twin Falls spent millions of dollars to lure those manufacturers to the city.

“Those deals they’ve done out there are costing millions of dollars, and they tend to be much more aggressive with being able to bond for things and do huge improvements to their sewer systems,” he said. “They tend to find ways to bring those costs down considerably.”

It’s great that Clif Bar is building a factory in Twin Falls; Barigar said his city is already seeing commercial and real estate development rise, and he attributes that to Chobani’s plant. Clif Bar and the other projects will undoubtedly have the same effect.

It would be good for Boise to win the same kind of projects. The Treasure Valley wants to be a contender in a fiercely competitive national market, and it sounds as though there are things local officials could do to tip the balance in their favor.

Mullis said the Clif Bar factory was an unusual shape and size: 1,200 feet long and 400 deep.

“I have no doubt that there was real estate in the Boise region that would meet the need,” he said. “Nobody had done their homework to show it to us.”

About Anne Wallace Allen

Anne Wallace Allen is the editor of the Idaho Business Review.

3 comments

  1. I appreciate your focus on economic development efforts in the State of Idaho and the Boise Valley. However, contrary to your statement in this column, we do have significant outcomes to show for BVEP’s efforts since 2011. we have successfully recruited eight new companies and created over 2,395 new jobs to the region. Information on BVEP’s goals, activities and outcomes can be found at http://www.bvep.org .
    Clark Krause
    Executive Director
    Boise Valley Economic Partnership

  2. Thanks for writing this article. As a planner who has been in Boise a mere 5 years, I’ve already heard from many people throughout the state that financing and urban development options as well as planning need to be better developed and valued. In places that “get it,” good things happen, and those good things tend to lead to better things. In places that don’t see the value of putting plans and business development incentives in place, they tend to experience slower or no growth or improvement in their communities. For larger regions like the Treasure Valley, there can be local control over these types of incentives and planning. In other smaller, rural communities throughout the state, I believe they need State support to plan for and access funds for basic services like water/sewer upgrades, waste removal and very elemental services. Without these needs being met, it is hard to move on economic development and renewal issues. In other nearby mountain states such as Wyoming, Colorado, where there is a comparatively very pro-active and coordinated approach to planning and economic development, all sizes of communities tend to thrive. There is strong leadership in many places and on many levels throughout our state, but I believe that leadership should be utilizing planning as a tool to galvinize communities into action, and for positive growth and change much more than we do today.

  3. It’s not mentioned by name, but just in passing, but a big factor is that Twin Falls has an urban renewal agency. While places like Boise and Nampa do have urban renewal agencies, Boise’s is focused on downtown development and Nampa’s is about to be shut down.