Economic Development and Government

Right Place: 30 years of networking

For the organization’s CEO, the first is still the best.

October 2, 2015
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The Right Place Inc. broke the ice when it attracted its first international investment to the area in 1990; now it’s celebrating 30 years of building a network of business relationships in West Michigan.

Right Place has provided comprehensive business retention, expansion and attraction services to companies in West Michigan for nearly three decades, which has resulted in more than $4 billion in capital investment and more than 40,000 jobs to the region.

While the critical fundamentals of economic development, such as the value of relationships, have not shifted in the last 30 years, the landscape has changed in terms of the level of sophistication and the globalization of the profession.

Birgit Klohs, president and CEO, said when the organization started it was only the second private nonprofit partnership for economic development in the Midwest and, until that time, economic development was handled by a city, county or chamber of commerce.

“To have the private sector back then lead an effort to create an economic development organization was something totally new. It was also a very simple business, if you will,” said Klohs. “You worked with your existing customers, you helped them expand and you attracted new ones. That hasn’t changed, but how we do that has changed a great deal.”

Now with the advancement of technology and increasingly competitive incentive packages from across the globe, Klohs said how clients consume economic development has changed, and the community has become more sophisticated and engaged.

“I liken it to a frog in the water: You keep turning up the heat a little bit at a time, so you don’t really notice the heat,” said Klohs. “It’s a constant nurturing of relationships, both locally with our existing companies as well as globally. Clients know what the individual states are giving and they can almost tell you chapter and verse before we can.”

The Right Place was established in 1985 as a privately funded organization, with 82 percent of its money derived from the private sector and the remaining 18 percent coming from municipal partners and foundations. Although the organization now is known for its initiatives to stimulate economic growth, wealth creation and operational excellence through retention, expansion and attraction, The Right Place in its infancy began as an attraction organization.

When Klohs was hired in 1987 to lead The Right Place, she advocated for adding retention and expansion components.

“We have more than 2,200 manufacturers in our region and everybody takes them for granted. They have choices and they are offered those choices every day from our competitors around the world and from around the country with incentives,” said Klohs.

“We need to stay ahead of that, and that is why most of our work, quite frankly, even after 30 years, remains business retention and expansion, and attraction is last.”

During 2014, 17 of the 22 projects The Right Place assisted with involved local businesses in West Michigan, according to the 2014 Annual Report. The organization drew roughly $315.4 million in capital investment, which resulted in more than 2,180 jobs created and retained.

“If you look at the numbers of any community, 80 percent of all new jobs generally are created by the companies you already have, which is why you’d better pay attention to them, for many reasons,” said Klohs. “Nobody wants to come to a dying community, so you need to help the companies that you have first.”

The Right Place has had a number of milestones throughout its 30-year history: helping 12 industrial companies expand in 1991, which resulted in bringing $126 million in investment and 524 new jobs to the region; exceeding its five-year strategic plan in 2004 with more than $543 million in investment and roughly 6,900 new jobs; helping to retain X-Rite in West Michigan and thereby keeping nearly $44.5 million and 440 jobs; and attracting Dicastal North America to Greenville in 2014.

The organization also worked with the city of Grand Rapids to launch the Urban Development Program, collaborated with Muskegon Area First to create the West Michigan Economic Partnership in 2013, and established partnerships with Ionia, Montcalm and Newaygo counties.

Klohs said her favorite attraction project was the first one on which she worked, since it helped people understand what the organization did and gave it name recognition.

“It is like asking a mother who is your favorite child. Each project has its own character; every one of them is different. My biggest project, not in terms of dollars or even jobs, was Behr Industries,” said Klohs. “It became so important because we had to show the community we can indeed attract new investment to Grand Rapids.”

Behr Industries, now known as NBHX Trim, decided to locate near 7 Mile Road and Alpine Avenue NW in Grand Rapids and brought roughly $20 million in capital investment and 200 jobs.

“It was a ground-breaking moment in that the community understood … we could play on an international stage and attract foreign direct investment to our region. It broke the ice.”

On the retention side, Klohs said a major milestone was the creation of the Manufacturers Council in 1989, which still functions today as a collaborative voice for the manufacturing industry and sharing of best practices.

“It has been one of the most satisfying things because it demonstrates the collaborative nature of this community,” said Klohs.

Today, The Right Place is led by team members Klohs; Twayne Howard, chief operating officer; Therese Thill, vice president of business development; Rick Chapla, vice president of strategic initiatives; Tim Mroz, vice president of marketing and communications; William C. Small, vice president of technical services and MMTC-West regional director; and Brad Comment, vice president of fund development.

While there are challenges such as continuing to receive funding, domestic and foreign competition, the loss of state funding by its key state-level partner Michigan Economic Development Corp., and talent attraction, Klohs said she believes there are opportunities in existing companies and regional collaboration.

“This is long, hard work of plowing the field, planting a tree and seeing it grow. It is not an overnight game. We have always taken the long view of economic development — we are very strategically oriented,” said Klohs. “On a global basis we have always gone out and represented the whole region. Our core competencies in this region are very deep expertise around smart manufacturing, food processing, research and development in the life sciences, and an enormously fine quality of life.”

The Right Place is hosting an anniversary celebration from 5:30-9 p.m., Oct. 27, at Amway World Headquarters in Ada.

“It is a relationship business and also what makes it fun because you get to know really great people,” said Klohs. “You get to know what a great community this is and how very connected and helpful they are. It is what kept me here for 28 years.”

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