Great Falls recharts economic course-Great Falls no longer content to sit, wait for a megaproject

Reaching for some note paper during an interview last week, Chamber of Commerce President Rick Evans grabbed a pad with "VentureStar" emblazoned across the top. It was an ironic choice.

By JO DEE BLACK
Tribune Staff Writer

Electric City leaders are shedding their tunnel-vision, done with efforts to land megaprojects such as the abandoned space program VentureStar, which would have brought 3,000 jobs to town.

Primary jobs and diversification are the new buzz words around town, the mantra of John Kramer, president of the Great Falls Development Authority.

To increase wages and opportunities for workers, the basic industries upon which the local economy relies must be expanded, he says.

Gone, too, are the days of relying on mostly government funds and grants to spur economic development. Private businesses are writing checks to support the effort.

The hype is undeniably linked to Kramer’s arrival about a year ago, and longtime leaders say the change is overdue.

"Everyone was always waiting for ‘The Big One,’" Evans said. "We needed a plan."

That plan is to get the attention of corporate America with the help of a marketing plan being developed by the consulting firm DCI of New York.

Another consulting firm, The Wadley-Donovan Group, recently completed an analysis of Great Falls that lists target industries the city should be trying to attract.

If the development plan works, the payoff would be impressive.

According to a Development Authority prospectus on the plan, by 2006, Great Falls will have 12 to 16 new primary employers and 1,800 to 2,400 new jobs that pay a minimum of $10 per hour, plus benefits. Those jobs will create a minimum of 1,000 secondary jobs that in turn pay a minimum of $7.50 per hour.

Today, Great Falls has 16 "primary sector" companies that employ about 1,500. According to the authority’s plan, expansions at those companies will bring 570 more jobs.

All this would boost Great Falls’ annual payroll by $67.6 million.

Along with new jobs, Great Falls will have $48 million to $64 million in new construction, the plan predicts.

The evolution in local economic development is understandable, City Manager John Lawton said.

"We lost a big industry, so naturally we tried to replace it with another big industry," he said, referring to the Atlantic Richfield Co. pullout in 1980.

Admittedly, that strategy didn’t work, but economic development has stepped up to a new level of sophistication, Lawton said. And he believes it will work.

"Is this effort worthy of trust? Yes," he said. "What’s the alternative?"

‘The Plan’

It’s widely known that the Great Falls area produces an abundance of agricultural goods, but its other valuable commodity — an abundant, well-educated work force — is still a secret, at least to corporate America.

Kramer’s out to change that.

"We’ve got a great product, it just hasn’t been marketed," Kramer said. "I mean this with all reverence: Even God had a marketing department. When Jesus was born, he sent the angels out to tell everyone. Without them, no one would have showed up."

The $100,000-plus Wadley-Donovan study confirmed what Kramer and others believe — Great Falls has assets that can attract primary jobs, jobs that generate 80 percent or more of their revenue outside the area.

Those assets include the Great Falls International Airport, the FedEx regional hub and readily available, quality labor at competitive wages.

"We have huge underemployment," Kramer said. "And we have an asset at Malmstrom. There are a lot of spouses not in the work force because wages are so low."

Wendy Byrd, 34, has a master’s in management, but spent a couple of years working in customer service and child care, making $6.55 an hour, tops.

Byrd wanted to be home with her two daughters, preschoolers at the time. She worked when her husband, a member of the Air Force, was off.

She says she’s happy with her part-time job at Healthy Mothers, Healthy Babies, but had there been jobs in Great Falls in her field that paid a competitive wage, she would have applied.

When people move to Great Falls, they often are shocked by local salaries, said Lori Hollis of Express Services, an employment company.

"I have a computer engineer from San Francisco who can’t find anything that pays enough for him to accept," she said.

Those are the workers that Kramer wants to tell companies about. He says that untapped work force will prompt companies to locate offices or plants here.

"Corporations make decisions based on cost," Kramer said. "Why? Because they have to answer to stockholders who want the value of their stock to go up and to get returns on their investments."

Targeted markets

According to the study, Great Falls should be going after:

“Administrative service centers, such as branch offices that process orders and bills.

“Customer support and service centers, such as those that provide telephone assistance for software or take catalog orders.

“Distribution centers for quick-delivery catalog orders.

“Distribution centers for quick-delivery of replacement parts, such as computer chips.

“Centers that ship emergency, refrigerated and frozen medical, dental and veterinarian products overnight, such as medical labs and blood banks.

The Development Authority is working with DCI, which Kramer likens to an ad agency, to develop a strategy to get Great Falls some attention in the business world.

"Then I implement the plan and generate leads," Kramer said.

Kramer points to other cities that have used that plan to their advantage, and grown: Fargo, N.D., Sioux Falls, S.D., and Boise.

Before coming to Great Falls, Kramer spent 10 years directing the Fargo-Cass County Economic Development Corp. During his tenure, the population grew 20 percent and average personal income climbed from $16,987 in 1992 to $25,073 in 1998.

New strategy

Kramer is focused on one goal: marketing Great Falls to businesses that will bring primary jobs to the area.

"I’m just a guy that sells a product," he said.

And the product, Great Falls, is perfectly marketable the way it is, he said.

That’s why Kramer won’t be lobbying for new business tax structures during the 2003 Legislative session, or strategizing on ways to build "lures" such as technology parks.

"I’m not going to fix the product, that’s somebody else’s job," Kramer said.

Private investment

Most hesitate to point fingers or lay blame for the lukewarm success of past development efforts. But most agree that business has played too small a role.

Great Falls Mayor Randy Gray said one thing that frustrated him most as an elected official was that High Plains Development Authority (now the Great Falls Development Authority) was funded exclusively by government.

"The economy is driven by the private sector, not government," Gray said, adding that his goal was to have the development organization get at least two-thirds of its funds from the private sector.

So when Kramer came to town, advocating to pass the hat to businesses to raise $2 million, he was preaching to the choir.

"I was tickled to have things pulled together, to have the private sector at the same table with the same goal," Gray said.

So far, about $1.6 million has been raised in the campaign, which will provide money to implement a five-year marketing campaign to attract new business.

Nancy O’Brien, executive director of Neighborhood Housing Services, knows the importance of creating public-private partnerships. Her efforts are widely credited for rejuvenating rundown Great Falls neighborhoods and helping people with low to moderate incomes buy homes.

"I’ve watched ever since John came to town, and I’m impressed with his approaches," she said. "He’s gotten the people involved who need to be involved."

O’Brien is also pleased with Kramer’s organizing efforts, which included assembling a council of more than a dozen business leaders to sound the rallying cry for the capital campaign, christened "Founding the Future."

In a 16-page booklet outlining the campaign and the plan it supports, council Chairman Ian Davidson of D.A. Davidson & Co., echoes the assertion that Great Falls’ economic base must change.

"We will continue to support agriculture and Malmstrom Air Force Base, but we must also build a third economic base," Davidson writes.

Born to market

Local business leaders seemed convinced that an economic rebirth is in the wind. The optimism is palpable, and warranted, they say.

"It’s not a fool’s optimism," said Deb Kottel, chairwoman of the Airport Authority Board and a University of Great Falls professor.

Kramer’s message has people fired up because it’s simple and believable, said Ike Kaufman, a longtime downtown clothing-store owner who’s also on the authority’s Leadership Council.

"The optimism my be guarded, but it’s there," he said

Many agree today’s attitude is a distinct change from the doom-and-gloom attitude of recent years.

Kramer says he’s no miracle worker, just an experienced economic development professional with a good track record.

"He’s not the only one out there, and what he’s doing isn’t a mystery," Kaufman said.

Another noticeable change of late has been a lessening of bickering and standoffs between local government and economic development officials.

"There is less conflict, and everyone seems to be on board as far as the general direction the community is going," Lawton said.

"It’s not unique to have groups with views that are in conflict, but I just walk away from that kind of politics," Kramer said. "I just want to do my job. It’s not about issues such as urban verses rural, it’s grow or die."

Asked what makes him good at his job, Kramer thought for a minute. "I’m not afraid to ask for a sale," he finally answered.

Business is built on relationships, and his years in the industry have allowed him to meet many of the players. For the most part, people who make it to the top are likable, people he enjoys, he said.

Kramer tells a story that sheds light on his marketing roots. His family once brewed Grain Belt beer, a Midwest classic that competed with other regional brands.

"Beer is 99 percent water, and in those days, was not a lot different from the other beers on the market," he said. "You made the difference, you had to market it."

So his uncle always carried a cooler of beer in his vehicle and often stopped to give a farmer in the fields a cold one, and to talk. And whenever he went into a lounge, he’d buy the customers a Grain Belt.

"Marketing is about relationships," Kramer said. "You need a good product, but it’s also about personal relationships."

A promise

Kramer is feeling the pressure of the level of trust and hope the community seems to have in him. "I’d be lying if I said I didn’t," he said.

He talked about a moment of personal enlightenment in a grocery store in Fort Dodge, Iowa, where he once worked in economic development. He had since moved, but was visiting and buying groceries for his college-aged daughter. He asked the cashier if he could write an out-of-town check; she saw his name and immediately said yes.

"Then she told me about how her dad had lost his job when a plant in town closed and had gone to work at Wal-Mart," Kramer recalled.

She said her dad’s self-esteem had plunged with his income, he was drinking too much and her parents were considering divorce.

"Then one of your projects reopened that plant, and he got his job back," the woman said. "It saved our family."

Although Kramer said he certainly was aware of the impact better-paying jobs have, that conversation drove it home.

"To me it had been a project, and I hadn’t really spent time thinking about how those jobs would change peoples’ lives."

Careful what you wish for

Even it the plan is successful, not everyone will be thrilled, Kramer said.

The goal is to create better-paying jobs and opportunities for people already here. But if the effort is successful, population growth will come, Gray said.

If the competition for workers heats up, employers will have to pay higher wages. That may irk some existing businesses.

Change will bring some pain, Kramer said.

"If I could change the economy of Great Falls, bring in another $400 million to $500 million a year, without adding jobs, I would," he said. "But it’s just not going to happen."

Beyond control

Although Kramer is confident the development strategy will work, there are three events that could derail his efforts.

"I can’t control whether or not the economy goes into a major recession, which I don’t think it will," he said. "I can’t control if the labor supply gets tight, but I don’t see that happening soon. And I can’t control the attitude of the citizenry."

He said he hopes to squelch the fears that can lead to an antigrowth mentality by letting the community know what the development authority is doing, and why.

It’s time for a brave new economic world in Great Falls, Gray says.

"We no longer have to rely exclusively on ingots of copper, board feet of lumber or bushels of wheat," he said. "Those things still have a place in Montana, but we can expand our economy. Maybe it’s just taken us 20 years to learn that."

Group tries to keep young crowd keen on Great Falls

Great Falls has lost 24 percent of its 25- to 34-year-olds over the last 10 years, and not just to higher wages. But many of those who are left are willing to pitch in to make the city more desirable to their peers.

The Young Enthusiast Society formed this spring after a focus group provided feedback from people in that age group.

"We can define what Great Falls is trying to become as a city," said Chris McGregor, 32, president of YES.

Increasing the number of cultural and social events that appeal to young residents is important, he said.

But YES members are most concerned about boosting opportunities for career advancement.

McGregor, a 1988 Great Falls High School graduate, is assistant executive director of Eagle Mount, a nonprofit organization that partners volunteers with children and adults with disabilities. Participants swim, go horseback riding and ski.

McGregor said he returned to Great Falls to be near family and loves his job. He wants the local economy to turn around so he can stay.

As a nonprofit employee, he’s not exactly looking for a huge salary.

"People aren’t going to stay if you can move three hours from here and make more money," he said.

Nancy Rowell, 35, is a professor on the Great Falls campus of the MSU-Bozeman College of Nursing. A 1985 graduate of C.M. Russell High School, she said she’s always planned to live in her hometown.

Great Falls is a good place for people to start getting an advanced education, Rowell said, but there’s room for improvement.

"We need to see more graduate programs offered," said Rowell, who says she’s trying to be a voice for Great Falls through her contacts at the college.

"I’m open to developing my role," she said. "I think change starts with us. People I work with are getting tired of me talking about YES."

Like McGregor and Rowell, Deb Matteucci, 33, returned to Great Falls after going to school and working elsewhere.

She’s found job opportunities in marketing, but used some creativity to build her career: she and her husband, Jeff Matteucci, also own a rain gutter business. They hope their three children can live and work in Great Falls if they choose to one day.

"That’s our dream, to at least give our children the opportunity," she said.

Chandria Engram, 22, returned to Great Falls last week after attending school in Florida. A 1998 Great Falls High School graduate, she’s helping her mom run a new business, Chrysalis Chair Massage.

Engram said she already sees positive changes in the economy.

"N.E.W. wasn’t here when I left," she said. "Of the top 10 employers in Great Falls, there’s about half I didn’t recognize."

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