Ionia County Economic Alliance forms partnership with Right Place

October 23, 2011
| By Pete Daly |
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The Right Place Inc. and the Ionia County Economic Alliance have formed a strategic partnership to support economic growth in the county and encourage more regional marketing efforts in West Michigan, according to The Right Place.

“Under the terms of the three-year contract, The Right Place and ICEA will provide comprehensive economic development services including business retention, expansion and attraction support to Ionia County businesses. Additionally, The Right Place will provide marketing support to promote Ionia County assets,” according to the announcement from RPI.

“One of the keys to future economic growth in West Michigan will be increased collaboration and a regional approach to economic development,” said Birgit Klohs, Right Place president and CEO. “To compete globally, we must work together as a region, not individual communities. Each community has unique qualities and assets, but when marketed as a collective whole, West Michigan becomes a national and international destination for business.”

The ICEA has lined up dozens of what it calls “investors” from both the public and private sectors in Ionia County — municipal and township governments, businesses and nonprofit organizations — who have already or are willing to put up money to help cover the salary of a new economic development staff member at The Right Place.

“A big player in this is the Ionia County Community Foundation,” said Robert Kjolhede, chairman of the ICEA. The foundation is “on board with an impact grant of $20,000 for this initiative, because (economic development) touches everything” that affects the quality of life in Ionia County. He added that the “number two leadership investor” in the new jobs initiative is the Ionia County government itself. The county has reportedly pledged about $17,000.

Private businesses that are represented on the ICEA board and are investors in the initiative, according to Kjolhede, include Stahlin Non-Metallic Enclosures of Belding and Herbruck Poultry Ranch in Saranac.

Kjolhede said the ICEA is willing to spend about $103,000 on the three-year partnership contract. He said the actual amount will be determined by the qualifications of the new staff person hired. The goal is to have that person hired by December or January. Kjolhede said ICEA and RPI will select that person together.

Klohs told the Business Journal that the final number is still being negotiated. “This is not an investment in RPI. This is a partnership contract. We are administering the funds for ICEA,” emphasizing that “we are not making money on this contract.”

Klohs said The Right Place’s marketing efforts will be expanded to include Ionia County economic assets, including the area’s agricultural and manufacturing sectors. Ionia County is one of Michigan’s leading livestock producers and offers “tremendous potential” for West Michigan’s growing food processing industry, according to the announcement. The county’s agricultural sector currently ranks fifth in Michigan, generating annual revenues of more than $200 million from more than 1,000 farms and 238,000 acres of farmland.

Kjolhede, who is superintendent of the Ionia County Intermediate School District, said that last year ICEA members felt “we were really kind of spinning our wheels” due to the erosion of funding for economic development in Michigan at the state level, and the weakness of the economy in general.

Diane Smith has been economic development director in Ionia County and will be replaced by the person hired by the ICEA and RPI. Smith had been “doing a great job,” said Kjolhede, but he added that it is very difficult for one person alone to manage all those functions.

Smith said the ICEA had a partnership with MSU Extension that provided a staff person to help with economic development, but that partnership ended.

Kjolhede said the ICEA “had to decide whether we were even going to have an economic development entity, and if we were, what would it look like? We decided we can’t sit back and just be reactive to all the things occurring nationally and in this state,” said Kjolhede.

He said the creation of more jobs “would help this county across the board” in both the public and private sectors.

The population loss in Michigan over the last 10 years is reflected in Ionia County, where public school enrollment is dropping “in every district except for one, I think,” said Kjolhede. “Over 80 percent of the districts are losing enrollment in Michigan,” he added, noting that in the 2001/2002 school year, Michigan had 1.7 million enrolled in the K-12 public schools, and that number now is 1.55 million.

The Right Place also has a partnership agreement with the Newaygo County Economic Development Office, according to Andy Lofgren, its executive director. The current agreement is for three years and will expire at the end of 2012, with NCEDO paying RPI $10,000 a year.

Lofgren said RPI staff “are great partners — willing and able.” The partnership agreement was “formed for (RPI) to provide assistance to us in certain areas,” he said.

“Truth to be told, they’d probably do it if we didn’t invest in them, but many years ago our board said it’s important that we kind of formalize this relationship to really show our appreciation for the work they do for us,” said Lofgren. He added that the partnership received funding from the Fremont Area Community Foundation.

Major businesses in Newaygo County (not counting hospitals) include Nestlé-Gerber in Fremont and Magna, which produces automotive mirrors, in Newaygo.

Three main goals set by the ICEA start with improved marketing of the county, said Kjolhede, and RPI will provide technical assistance for updating the ICEA website. Another goal is new business recruitment, and “Birgit and her staff are very good at that.”

The third goal is retention of existing businesses, which is “probably the best investment of our time,” Kjolhede said.

“Let’s spend time to make sure the business and industry that’s here is functioning and going to stick around, before we go chasing after new ones.”

He added that during discussions with RPI, Klohs stressed that “it costs you five times more to get a new business to come in than simply concentrating on keeping the business you have, and assisting them in expanding.”

“The other thing we have with this partnership: We have Birgit,” said Kjolhede.

He said the partnership “is really in line with the governor’s regionalization initiative that he has talked a lot about. He really doesn’t want to have a bunch of people in Lansing for the MEDC. He wants to have them out working with the regional economic development confederations, or whatever you want to call them.

“We just felt that the support and services that we can get from RPI would allow our person (who will be hired at RPI) to concentrate on those three major goals,” said Kjolhede.

Organized in 1985, The Right Place Inc. is a regional nonprofit economic development organization serving West Michigan, supported through investments from the private and public sector, according to its website. It works to promote economic growth in the region by developing jobs through leading business retention, expansion and attraction efforts.

In 2010, RPI assisted nearly 1,500 companies, connecting them to a variety of assistance programs. For many companies, that included assembling incentive packages to encourage more than $152 million in new investment, nearly 1,800 created and retained jobs, and more than $64 million in new payroll.

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