Ohio’s Economy of Relationships
19 Feb, 2014
By Rachel Hamilton
Ohio has turned its economy around and is seeking businesses that want to thrive.
JobsOhio is now the statewide entity in charge of economic development in Ohio. John Minor, president and CIO for JobsOhio says, “We have privatized economic development functions for the state and secured a private sector approach. We’re not part of a state agency.”
Chris Wimsatt, who is both the economic development director for the city of Fairborn and the executive director of the newly formed Fairborn Economic Development Corp., says, “JobsOhio is much more regionally focused. It’s not as bureaucratic. It works quicker and it seems to help build the team a little more.”
Minor says the change represents “a 180 degree turn. There was a project-oriented mentality instead of a relationship mentality. […] We’re actually happy to go visit companies and talk with them about how they can be successful and how they can thrive in Ohio.” He says the new approach resonates better with businesses.
Minor praised the state itself too, saying, “This state is financially stable. When this governor came in, this state was facing an $8 billion deficit; now we’re well into a surplus.” He is particularly pleased because, as he says, “Companies pay attention to the stability of a state.”
They are seeing positive impacts from that turnaround in Cincinnati. Matt Davis, interim executive director for the Cincinnati USA Partnership, says, “It’s important to note the renaissance we’ve had both in quality of life in our urban core and our economic development numbers, which are better each year in terms of job creation. Cincinnati’s emerging again as a hub of economic opportunity — startup or Fortune 500.”
Down to Business
*The JobsOhio Growth Fund Loan can provide loans, typically from $500,000 to $5 million to qualified companies, in the growth, expansion, or established stages, with preferences given to companies with certain factors such as job creation, additional payroll, and/or fixed-asset investment commitment.
*The JobsOhio Economic Development Grant exists to provide funds to companies engaged in targeted industries and business functions in Ohio, focusing on fixed-asset and infrastructure investment that creates jobs.
*The Research and Development Investment Loan Program (R&D Loan) can contribute $500,000 to $5 million toward qualified projects that are creating R&D opportunities and high-wage jobs, and it can offer a maximum annual tax credit of $150,000.
*The Ohio Enterprise Bond Fund (OEBF Loan) can provide eligible, developed companies with $2.5 million to $10 million for projects that retain and/or create jobs and are related to industry, commerce, manufacturing, distribution, or research activities in targeted industries.
Industries and Innovations
JobsOhio has nine targeted industry sectors, Minor says. They are energy, information technology, advanced manufacturing, automotive, aerospace, food processing and agriculture, financial services, chemicals and polymers, and biohealth. “It’s a diverse industry base,” he says. “We’re getting ready for this next big era of productivity.”
The productivity Minor sees also includes supply chain distribution from a combination of Ohio’s access to rail, interstate highways and the Ohio River, and Ohio’s existing “core strength in manufacturing and suppliers.”
Davis says that Cincinnati has been able to optimize use of its manufacturing history, converting an old Ford factory into one for a manufacturer of industry drink cups, which created 208 new jobs. They also welcomed Festo Americas, a German high-tech manufacturing company that Davis says created 250 new jobs in 2013.
In Fairborn, Wimsatt sees the possibility of supply chain distribution as very promising. “Because we have rail, highway and air here, manufacturing companies are turning into distribution companies here.”
It is Fairborn’s proximity to Wright-Patterson Air Force Base that Wimsatt is most excited about. “It’s the largest employer in Ohio. […] They do all sorts of really cool things when it comes to UAVs and human development. There are hundreds of defense contractors and R&D groups.” Wimsatt also explains that while the base has a $5 million impact on industry, it doesn’t market most of what it does.
Wimsatt says, “My community is always trying to promote it. We have a lot of larger scientific defense contractors expanding, but it’s hard to understand it from the outside. We are poised to benefit from the base and grow as the base grows.”
Cincinnati benefits from its high concentration of Fortune 500 companies, including Kroger. “Fortune 500 companies put us at a strategic advantage to attract companies who want to be in their supply chains,” Davis says.
Economic Development Director Cynthia Leis of Van Wert County says that manufacturing and agriculture are the largest industries in her region. “Eton Corp. and Federal-Mogul are our largest employers,” she says. “Manufacturing for us is more parts supply than assembly, but we do have a major employer who manufactures the actual grain wagons and some tillage type equipment.” Solar and wind energy are also important in Van Wert County, which is home to an Iberdrola Renewables wind farm.
Davis says, “Energy is growing in Ohio. There’s been a spike in both production and jobs,” adding that the Cincinnati region has “many companies that are in that supply chain pipeline.”
Other industries thriving in Ohio are “IT and big data analytics” Minor says. “IBM put its data analytics center here in Columbus.”
Talent and Education
Van Wert County is an excellent example of partnership between education and industry. As Leis explains, Vantage Career Center (VCC) has its own 1 megawatt solar array that powers the campus. The center offers training for both solar and wind technicians, and they are a site for American Welding Society certification.
Davis says that Cincinnati is focused on having the right ecosystems available so the companies in them can grow. “We’ve been working closely with Governor Kasich to make sure that our educators have a good sense of what the forecast looks like for companies,” he says. “If, in 18 months, a company needs 100 welders, we’re training 100 welders. That’s what’s going to set states apart in terms of economic growth.”
In Fairborn, Wimsatt says the population of workers is transitioning well from older manufacturing to newer manufacturing. “We have found that when the industry transitions into a new kind of industry, the community college network is what helps.” Fairborn has access to Sinclair Community College in Dayton, the largest community college in Ohio, and Wimsatt says they work together at every opportunity.
Outdoors and Recreation
In Knox County, Ohio, you can visit the Honey Run Waterfall and Honey Run Highlands, a 369-acre park offering not only the beautiful 25-foot falls, but also Blackhand Sandstone cliffs and rare plants, as well as access to the Kokosing River, one of Ohio’s designated scenic rivers.
“Ohio has a lot to offer,” Minor says. “We’re strategically located within 600 miles of 60 percent of U.S. and Canadian manufacturing.” In addition to the state’s rail and roadways, its southern border is the Ohio River and most of its northern border is Lake Erie.
The tax structure in Ohio is advantageous for businesses as well. Minor says, “We’re among the top states when it comes to having the lowest tax rates.” Their Commercial Activity Tax is a “particularly attractive element to our tax structure,” he says. “When companies export products out of state, they don’t have to pay taxes here.”
Van Wert County has business and industrial acreage available, but they are most excited about the construction of a 1,600-acre megasite that can accommodate one end-user of 1,000-1,500 employees, Leis says. The site is awaiting official shovel-ready certification from two entities, which Leis says is scheduled for this year. The site has access to rail, highway and fiber-optic Internet, and is within one mile of a regional airport.
Wimsatt says that one big advantage of the Fairborn and Dayton region is cooperation. “Our regional municipalities all work together really well,” Wimsatt says. “Our community leaders actually present how well our communities work together for the IEDC’s Community Economic Development Program, and some of our region’s leaders help teach the business expansion portion.”
Fairborn is in the process of building a new industrial park as well. “It’s right off of I-675 and just below I-70,” Wimsatt says, and he believes that interstate access will help draw the distribution industry.
Cincinnati, Davis says, has the closest access to the only international airport in Ohio, Kentucky or Indiana. It is Cincinnati/Northern Kentucky International, located just south of the Ohio River in Hebron, Ky.
Ohio’s low cost of living, thriving health care system, excellent natural resources, eight professional sports teams, regional and local festivals, and growing arts scenes make for a high quality of life for its residents. Minor says, “What we’ve found is that when people come to Ohio, they rarely leave. Ohio offers a lot.”
The lifestyle in Ohio benefits a lot from Ohio’s low cost of living. Wimsatt says, “It’s 92 percent [of the national average], and site selectors are amazed at home prices and the cost of living index. Because of that, we attract a lot of back-office functions too, like accounting and call centers.” He adds, “Our health care system is quite robust.”
Davis makes a point to showcase Cincinnati Children’s Hospital Medical Center, which has been ranked third in the country for three years in a row by U.S. News & World Report. He says that the hospital “has tremendous research capabilities as well, and that brings new talent to the region.” The hospital in fact grew from 6,400 employees in 2003 to 12,500 employees in 2013.
Davis also mentions that Cincinnati has been revitalizing a section of its downtown called The Banks, which lies between the Reds’ Great American Ball Park and the Bengals’ Paul Brown Stadium near the riverfront and north for about 20 blocks. The Banks has produced a lot of impressive new restaurants, and one Cincinnati specialty diner, Tom + Chee has gained national recognition.
Van Wert County has also been revitalizing, and Leis called the downtown in the city of Van Wert the county’s “biggest attraction.” In November 2013 Van Wert added a venue for visual arts, the Wassenberg Art Center. This joins the Niswonger Performing Arts Center, which has already been attracting Broadway shows and nationally known artists including Trace Adkins and Kellie Pickler.
Fairborn Economic Development Corp.
Illustration by ddpavumba at Free Digital Photos.net