The quarterly report and site selection process report from the Rolla Regional Economic Commission was presented to the Rolla City Council along with the appointment of a new member on the Rolla Regional Economic Commission Board.
The Quarterly report was presented by Executive Director of the Rolla Regional Economic Commission (RREC), Cyndra Lorey, who looked at the most effective ways in which the RREC can help bring new companies into the Rolla and Phelps County area.
Lorey started by reporting to the Rolla City Council on Nov. 19 that the old ways of generating leads for economic development projects or industrial development projects are not effective in current economic development efforts, and Lorey described new approaches the RREC is undertaking in making leads.
“The old idea of knocking on doors is pretty outdated and individual marketing is like trying to find a needle in the haystack and isn’t very effective as well as very expensive especially for smaller communities,” said Lorey.
Attending and taking part in trade shows and generating leads through the media isn’t as practical anymore, said Lorey. Both are expensive, where attending trade shows can cost anywhere from $10,000 to $30,000, and often result in not knowing a company’s prospective future needs, while it’s easy to get lost in the shuffle when trying to generate leads through the media.
“So the most effective way for us to try to bring new companies into the Rolla and Phelps County area is to utilize what is called the Missouri Partnership, and that is the state’s marketing arm as well as recruitment,” said Lorey.
The first challenge in getting a company to consider Rolla as a potential site location is to get the company to look at the State of Missouri in general. The Missouri Partnership takes part in a variety of events targeting companies, consultants and brokers, and also has the budget to reach out to site consultants and companies worldwide.
Fifty percent of companies rely on consultants and brokers, said Lorey, and the Missouri Partnership finds out what the company is looking for, and then based upon the company’s needs decides where to send out the information about project leads.
“It may go statewide, it may go to certain metropolitan areas, they may even specify certain parts of the state like down in the Bootheel where there is a lot of rice production or that type of thing,” said Lorey. “And again it’s due to their suppliers, customers and transportation. All of those types of things go into their decision on where they need to put a new facility.”
And more than ever the availability of workforce has come into the picture, and the company is looking where there is a large enough labor pool to support hiring the number of people they need to initially open and also to continue when there is turnover, said Lorey.
The process then continues with the Missouri Partnership sending out a request for information, and communities submit potential buildings and sites that best fit the request. Then that consultant or company sifts through the information requested and decides who they want to look at, and they will come back and ask for more information, and maybe the area will get a site visit.
“Then many times you go through that same process a couple more times, more information and maybe they will come back and visit again. So it’s kind of a funneling down effect that is more of a de-selection than it is a selection process because they try to get rid of the places that don’t fit,” said Lorey.
The general location is based on the company’s needs and No. 1 on the list is where the company will most likely find a new labor pool, said Lorey, which is determined by the workforce, skilled labor and talent in a specific location.
Next, is identifying if there is a building or site available for the company because it doesn’t do any good to have all the other requirements without having a building or site to start with, said Lorey. And how does that meet the company’s specific needs follows.
It’s a weighted decision-making process, and the company establishes requirements, consequently the most weighted conditions have changed over the past two years, said Lorey.
“You might notice there, when I was saying labor is so important, remember this was back in 2015 when the unemployment rate in the State of Missouri was at 6.1 percent, and it’s now down to 2.6 percent,” said Lorey. "So you can see why it wasn’t as important then as it is today.”
What this means for the Rolla area:
“There are not as many companies relocating to Missouri or any state for that matter as one might think,” said Lorey. “You talk to people; sometimes they think there is a new company opening up once every month in every little community, and also to realize that the metropolitan areas really have that advantage and it goes back to that labor pool.”
In 2017 there were only 21 successful projects throughout the entire state of Missouri, mostly in the St. Louis area. Ten of the projects had 100 or more employees. Three of the projects had over $100 million in capital investment, and seven of the projects came with over $10 million in annual payroll.
In FY2018 there were only 18 successful projects throughout the state of Missouri. There were 3,480 new jobs, $145 million in new annual payroll and $655 million in new capital investment, said Lorey.
“And you see that it’s not just something that happens every day in the economic development industry,” said Lorey. "So I keep harping back about labor pool, and I do so because it is so imperative.”
St. Louis Community College in a 2018 report found that just in the Midwest there are 20 percent more job openings than there are job seekers. And the St. Louis region had over 45,000 open job positions in July 2018, said Lorey.
And the RREC in 2015 completed a Labor Basin Study, and found that in the 11 county area that a company in Rolla could expect a draw from, there is a population of only 318,403 people, of which only 75,069 people are in the age group that would qualify in the labor pool, said Lorey.
“So that is one of our challenges, the second thing they have to look at is if there is a building or is there a site,” said Lorey.
So far this year the RREC have had 18 requests for information, and of those 18, 12 of the requests for information were asking for buildings. There were five requests asking for existing operations in the area, such as a particular type of plant or dairy operation, which was something new noted Lorey, who said she saw this for the first time this year.
Only three looked for a Greenfield site, a site where they could have a building built.
“And out of all these projects four of them required that they be rail served, so ultimately we were only able to submit on four of those requests,” said Lorey.
The action plan laid out by Lorey for this year is to continue a focused marketing strategy with the Missouri Partnership, while also utilizing Canadian Connections the RREC made just last October, said Lorey. “We are going to collaborate with the two other communities that went along on that.”
Next, the RREC will start focusing more strongly on retaining and growing the area's existing companies -- which is where most job growth comes from -- and continue to build relationships and address problems existing companies may have that would keep them from expanding or ultimately cause the companies to relocate somewhere else, said Lorey.
The RREC is adding a workforce awareness component and is also collaborating with the chamber to promote quality of life as a component of retaining and attracting the labor pool for the upcoming years in Rolla and Phelps County.
Lastly, Lorey asked the Rolla City Council to approve one of the council’s seats for a new board member who is a professional in the workforce development area.
The RREC board is comprised of various types of seats. The original founding partners, of which there are five, all have the opportunity to place one person on the board, said Rolla Mayor Louis Magdits.
“The City of Rolla, by virtue of the amount of contribution to that particular entity is to provide, with your consent, three board seats. And the balance of the board seats are nominated and selected by the founding partners themselves,” said Magdits.
Two board seats are coming up. One is the city appointment, and the one seat following that is appointed from the founding partners, said Magdits.
Rolla Mayor Magdits added that talking to the executive committee, it’s crucial that board membership matches the needs of an organization at any one point in time and right now labor is an issue, and labor is an issue nationwide concerning quality and availability.
“So we would like to use this board seat for somebody that is going to help the board understand and appreciate some of these labor issues that we have in front of us,” said Magdits.
Rolla’s Mayor then proceeded to state he would like to appoint Alexandra Blackwell. Blackwell is the executive director of the Central Workforce Development Board based in Rolla.
The Central Workforce Development Board’s mission is to ensure quality workforce and development over a 19 county region, and they are chartered by the Federal Government to provide oversight of workforce development activities in Central Missouri, said Magdits.
“They set policy and select and supervise providers of employment and training programs, so we would like Alexandra Blackwell to help us understand the local labor market quality and amount and then help us understand and assess the regional capabilities because there are a lot of people that sort of deal with workforce issues in our region,” said Mayor Magdits.
And with approval from the Rolla City Council, Alexandra Blackwell was appointed to the Rolla Regional Economic Committee Board on Nov. 19, 2018.
The Rolla Regional Economic Committee is a not-for-profit corporation dedicated exclusively to the economic development of Phelps County and the Rolla-St. James region. Rolla-St. James stakeholders are engaged and active in promoting the success of the region and development partners come from both the public and private sectors.