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4A Wichita Falls Economic Development Minutes - 05/16/2017MINUTES OF THE JOINT MEETING OF THE WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION AND THE WICHITA FALLS CITY COUNCIL May 16, 2017 PRESENT: Dick Bundy, President § WFEDC Members Reno Gustafson, Secretary -Treasurer § Darron Leiker § Dave Lilley § Stephen L. Santellana, Mayor § Mayor and City Council Michael Smith, Councilor At -Large § Eric West, Councilor, District 1 § DeAndra Chenault, Councilor, District 2 § Jesse Brown, Councilor, District 4 § Romeo Montez III, Councilor, District 5 § Jim Dockery, Deputy City Manager/CFO § City Staff R. Kinley Hegglund, Jr., City Attorney § Blake Jurecek, Director of IT and Facilities § Tracy Norr, City Clerk § Linda Merrill, Recording Secretary § Henry Florsheim, CEO (via telephone) § Chamber of Commerce and Industry Kevin Pearson, V.P., Economic Development § Travis Haggard, V.P., BR&E § Ann Arnold -Ogden, Community Marketing Director § Adrene Wike, Research Associate § Brian Havins, Marketing § Darrell Coleman, Treasurer § Ripley Tate, Vice -Chair § Jim Bruce § Bruce Facility Planning Consultants Jerry Schneider § Bill Boyd (via Skype) § ABSENT: Brian Hooker, Councilor, District 3 § City Council Leo Lane § WFEDC Member 1. Call to Order Michael Smith reconvened the City Council meeting at 1:30 p.m. Dick Bundy called the WFEDC meeting to order at 1:30 p.m. The purpose of this joint work session was to receive the final report from aerospace consultant, Bruce Facility Planning Consultants (BFPC). 2. Presentation of final report from BFPC Kevin Pearson stated this process began in November 2015. BFPC was chosen after a search of a number of consultants. They have gone above and beyond the scope of their contract, including a review of peer cities successful in aerospace recruitment. He introduced Jim Bruce and Jerry Schneider, and Bill Boyd (attending via Skype). Mr. Schneider appreciated the cooperation and enthusiasm from the community. He believes they have produced a workable, five -phase plan: 1. Strategic Analysis of the Area Economy 2. Competitive/Comparative Analysis of Wichita Falls 3. Target Industry Identification 4. Development of Economic Development Marketing Studies for Selected Business and Industry Targets 5. Consolidated Marketing Plan 1. Strategic Analysis The community has potential. However, the population and economy has not changed for some time, while other parts of Texas have experienced tremendous growth. Wichita Falls has a relatively low presence in the business and economic sectors that have been vital to the growth and development of the rest of the state, such as professional, technical, scientific, and financial services. (Mr. Bruce noted that the city has shown an increase in employment in each of these sectors over the past year, however.) There are high -quality employees at the Chamber, but a more aggressive economic development program is needed. Wichita Falls is in a good position, as many costs are lower than in other parts of the state and surrounding areas. Private companies find that very appealing. The city was hit with bad publicity from years of drought, which was offset by the good publicity garnered by its creative response to it. Midwestern State University and Vernon College are valuable resources. However, Wichita Falls has a high amount of government employment, which opens the door to the risk of cutbacks. Also, the city has many branch or divisional -level companies located here, versus the corporate level. That leads to the potential that corporate could cut back on these lower -level branches or they could be sold. The focus needs to be on developing higher -level professional services and manufacturing activity. BFPC was tasked with determining whether Wichita Falls was justified in having aerospace and aviation as a focus area, and they believe it is a supportable endeavor. About 4% of the local area is involved in aviation and aerospace, twice the national amount. Councilor Montez asked what businesses not related to Sheppard AFB are included in this percentage. Mr. Bruce promised to get him that information. Mr. Bruce said this area is probably not appropriate for a large company to develop a full- fledged airline manufacturing facility, but there is opportunity to pursue companies that manufacture parts and components. Wichita Falls is in the middle of the largest concentration of aerospace design and manufacturing in the U.S. Many companies are looking for branch operations or a stand-alone company. With its berall, there e a lotse to of opportunities, es, butorth and Wichita Oklahoma City, this city could fill that need. O ar Falls needs more marketing and promotion. 2. Competitive/Comparative Analysis Bill Boyd said BFPC looked at 37 potential communities. Applying comparative filters, such as proximity to a major military installation and research university, they narrowed the list down to two areas worthy of emulation that have enjoyed success in the aerospace sector: (a) Golden Triangle, Mississippi, and (b) Auburn -Opelika, Alabama. Both area's universities are very involved in the economic development process, and both communities have technology parks. Mr. Boyd recommends such a park in this area, plugged into MSU and Vernon College as they expand their capabilities. Mr. Dockery asked what a technology park would contain. Mr. Bruce said it is essentially a smart park. Mississippi State University has one, which has a multi -tenant building that houses start-ups. Those businesses benefit from the tie- in to the university, where they can get expertise from faculty, and hire student workers. Every community is different, but Wichita Falls does not fund its economic development at the same level as do these communities. There is evidence that success in development is related to funding. Economic development is a professional activity. It is necessary to be highly focused. 3. Target Industry Identification Phase 3 targets specific industries that meet a number of criteria as appropriate for Wichita Falls to pursue. Wichita Falls needs more skilled, high technology jobs in selected areas of manufacturing. At the same time, it is important to look for companies that need the attributes that Wichita Falls has to offer. There are four specific areas BFPC has targeted as high priority sectors: 1. New production technologies (composites, plastics/polymers, powder metal technology, additive manufacturing) 2. Specialized, high -end machine/metalworking shops for aerospace 3. Electronic, electrical, measurement, and control parts/components 4. Aerospace and related stand-alone project offices (These offices are not exclusive to aviation, and would fit with the downtown redevelopment efforts.) Councilor Smith said the sectors have some connection to the automotive industry, as well. Mr. Schneider agreed, noting that Auburn started mostly in the automotive industry. 4. Development of Economic Development Marketing Studies for Selected Business and Industry Targets Mr. Dockery asked if there are things Wichita Falls should/should not be doing in order to attract those tech and higher paid business services jobs referenced earlier in the meeting, or is its workforce not suitable for that type of employment. Mr. Bruce said he found a great deal of satisfaction from companies with the quality of the workforce. The problem is that people are coming out of Vernon College and MSU and cannot find employment here. Wichita Falls has an asset in an unseen workforce that would probably be easy to attract back to this area as opportunities arose. Any community will have limited resources for economic development. He hopes Wichita Falls will expand its spending, but there are never enough funds to do everything. If the target is too large, the focus becomes diluted. 5. Consolidated Marketing Plan Mr. Bruce said this final phase identifies the industries very specifically, and why Wichita Falls would be attractive to them. He urged that this material in the report be treated with confidentiality, as it is part of the City's internal corporate economic development strategy. Mr. Bundy asked if industries such as in China have affected the U.S. markets. Mr. Bruce said it will be 5-10 years before any aircraft -type products will have the opportunity to penetrate the U.S. market, which still enjoys one of the lowest cost locations of the industrialized nations. Aviation is not something that can be started on a fast -track basis. Mr. Schneider said pursuing these types of businesses is a long-range program. The folks in Alabama start with 20-year plans. They encourage Wichita Falls to increase its profile as a prime location for new facilities, relocations and specific branch locations and aerospace -related firms. He urged the city to be aggressive about a branding strategy. Mr. Bundy asked if BFPC prioritized budgeting above workforce size, development, or ethics. Mr. Bruce said the workforce in Wichita Falls is ranked 70%-80% in quality. There is no concern about the ability to staff a wide range of operations, including those here, and natives who are reluctantly working elsewhere. Mr. Pearson asked if it was worth the effort to go after companies with over 1,000 employees, or should they focus on smaller companies of 100-300 employees. Mr. Bruce said he does not see a lot of large companies coming down the pike. Most economic developers would rather have 10 smaller operations employing 100 versus one company with a staff of 1,000 employees. That is a volatile situation. In addition, a new company does not get many out of the ranks of the unemployed; rather, it attracts people away from existing companies. Councilor West asked how to quantify the number of people who would move back to Wichita Falls if employment opportunities arose. Mr. Pearson said he has tried to do that several times, and never found a good way to do it. Adrene Wike is working on a list of the MSU alumni, 4 and is on a research advisory committee. Ms. Wike noted that Councilor Jesse Brown will serve on that committee. It is just in the beginning stages, and hope to have something put together by fall. Dave Lilley said he had long wondered about leakage, and wondered if the answer to the question might be found by identifying how many people leave the area after graduation. Mr. Pearson noted that Mr. Boyd had indicated he would be willing to come to Wichita Falls for a budgeting workshop. Mr. Boyd agreed, stating that he spent 23 years running economic development organizations and therefore has a good deal of experience formulating budgets. He believes he could provide useful insight into the process. Mr. Bundy said it would be good to have that comparative and know how underspent Wichita Falls is, especially considering the comprehensive strategy that is now being discussed. Mr. Schneider said Texas had an aerospace commission, which has since been dissolved. He suggests Pratt & Whitney be contacted, as well as other local aviation businesses, to get their ideas. Mr. Pearson said Adrene Wike and Travis Haggard went to an MRO trade show in Orlando, but first visited with Pratt & Whitney about which companies to target at the show. The Chamber has also contracted with Applied Marketing that has provided a list of 130 companies that are interested in expanding or relocating. They then hired 310 Ltd. to prequalify those companies on the Chamber's behalf and set up telephone calls for him to make when they come across a company interested in this area. In addition, he is heading to the Paris Air Show and has contracted with a company to set up appointments for him for contacts at the show. 3. Adjourn Reno Gustafson moved seconded by Dave Lilley, to adjourn the meeting. The WFEDC meeting adjourned at 3:26 p.m. D ck Bund , President 5