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HomeMy WebLinkAbout05/23/1983 Meeting e e e M I NUT E S Eugene City Council Dinner Meeting Oregon Pacific Economic Development Corporation Hilton Conference Center, Bloch Room May 23, 1983 5:30 p.m. PRESENT: l. L. Stewart, Mayor Gus Keller, Tom Wildish, Mike Gleason, Freeman Holmer, John Ball, John Ohm, Mark Lindberg, Steve Romania, Tom Hoyt, John Anderson, Emily Schue, John Alltucker, Cynthia Wooten, Brian Obie, Betty Smith, John Amundsen, Lloyd Milligan, Dolores Maxwell, Pat Lynch, Mike Shadbolt, Doug Eveleth, Dan Cudaback, Dave Whitlow, Charlene Fauria, Barbara Bellamy, Mark Matassa, and Fred Webb. I. WELCOME Mr. Stewart, Chairman of Oregon Pacific Board of Directors, welcomed and introduced those present at the meeting hosted by the Oregon Pacific Economic Development Corporation. II. REVIEW OF THE FEBRUARY 14, 1983, OREGON PACIFIC/EUGENE CITY COUNCIL DINNER Mr. Wildish stated that his impressions of the February 14 meeting were very positive. The three participating groups (the Chamber of Commerce, Eugene City Council, and Oregon Pacific) shared common objectives and goals, and they appeared serious about good coordination and cooperation in the area of economic development in order to create more jobs and a better business climate. He was particularly pleased to hear Mayor Keller state that economic development has been Eugene's No.1 goal for the past three years. Mr. Wildish repeated the goal and program for Oregon Pacific outlined by John Anderson at the last meeting: 1) establishing a stable financial base; 2) establishing relationships with regional media; 3) establishing a link with the community; 4) exploring the feasibility of the SBA 503 program; and 5) foreign trade. Mr. Wildish felt that substantial progress has been made in some of the goals, and he would like to see continued cooperative efforts, especially in the following areas: 1) outreach activities such as recruiting; 2) diversification; 3) some goal or perception of the number of jobs to target; 4) some further studies on how to address land-use planning issues; 5) addressing the matter of taxes; and 6) services that the corporation might perform under contract with the City of Eugene. ' MINUTES--Eugene City Council/0PEDC May 23, 1983 Page 1 III. OREGON PACIFIC PROGRAM BRIEFING ~ Mr. Anderson described the progress made since the last meeting. The program draft was returned to the board and the program and budget of $650,000 for 1983 was approved. Oregon Pacific moved to new offices on the second floor of the Citizens Building. Dan Cudaback, Oregon Pacific's newly appointed Director of Planning and Administration, was designated liaison to the Business Assistance Team and has been a regular participant with them. Programs which have been completed or that are in place since the last meeting include: 1. A film promotion project targeting 100 Hollywood producers has been completed, resulting in one commercial film in Cottage Grove and two feature length films under consideration for the area. A film promo- tion manual for producers and major advertising agencies is in production and scheduled for completion in June. 2. Last November, the Oregon Economic Action Council created a partner- ship by contributing funds to NEDCO--Buy Oregon First program--with a proviso that Oregon Pacific be a management partner in the process. Mr. Anderson said it was felt that this was a very good program up to the point of import substitution, at which point Oregon Pacific parts company with it. 3. A tourist development demonstration project funded by the Lane County Private Industry Council, using Federal Department of Labor funds has been publicly announced. The $36,000 project has the Eugene- Springfield Visitor and Convention Bureau and the Lane County Chamber of Commerce as subcontractors and Oregon Pacific as prime contractor. Between now and the end of September, a series of experimental tourist and tourist destination and development activities will be done. e 4. With funds from the Lane County Private Industry Council, an innovative export development program will take five to ten lane County businesses or producers of agricultural products from the concept of finding an export market, training them through field exercises, and by September, bringing them into negotiations abroad. The markets of Tokyo, Seoul, Taipei, and Hong Kong were selected because of their favorable market conditions, although Oregon Pacific's interest in export development is not limited to those markets. 5. In the recruitment of plant and factory investments from outside the area, we have a fairly competent referral program in place now. It is a reaction program which uses existing networks to produce investment leads. Programs that are currently in the process of being implemented or developed include financial assistance to existing businesses in the area. Oregon Pacific has been asked to consider entering into a cooperative program, becoming a screener and packager for Lane County for the SBA-503 program. Oregon Pacific would work with a newly formed Corvallis-based, multi-county, non-profit organi- zation, Cascade West Financial Services, Inc. It is seen as a needed program. The other two aspects of financial assistance are pre-export financial assistance, e MINUTES--Eugene City Council/OPEDC May 23, 1983 Page 2 - for which some government funds are available, and the Venture Capital program. Finally, in June or early July, the Move to the Marketplace recruiting program is to be initiated, taking advertising in magazines such as Pharmaceutical Executive. It will emphasize research in the High Tech Corridor. IV. CITY OF EUGENE PROGRAM BRIEFING Mr. Gleason indicated that program coordination has come a giant step in the last 90 days. The whole metropolitan environment has been working together more cohesively. The biggest element in that has been the addition to the Business Assistance Team program of Mr. Cudaback from Oregon-Pacific, the Springfield program, and the Springfield Chamber of Commerce, as well as all the other major institutions including LCC, the two cities, and the two chambers of commerce. All have a common and consistent focal point for their programming, as well as the sharing of prospects. It has led to the sharing of roles on the Research Corridor as well as in the Ambassador Program and in work with NEDCO. Some successes have been seen by being able to focus on the State level. The City has been able to secure a whole different level of commitment from the State Department of Transportation regarding the 6th/7th Avenue corridor, reconstruction of 6th and 7th avenues, and expressway development. The City Council is getting ready to let a $5 million Bancroft project in the Willow Creek area. - There has been a reorganization in the City which consolidates job training, block grants, and downtown and business assistance programs into one department called the Development Department. There has been a substantial improvement in being able to coordinate and communicate the actual contacts between the two cities and the two chambers of commerce. There is a sharing of who is doing what role. Computers have just been put in place to track that program. V. PRESENTATION OF CANDIDATE COOPERATIVE PROGRAMS e Mr. Anderson explained what a foreign trade zone is and suggested that the City might be interested in involving itself with Oregon Pacific in studying the feasibility of establishing a foreign trade zone in this area. The foreign trade zone concept goes back to the 1930s in this country, and such zones have been located around the world since the 1920s. Legally, a foreign trade zone is a special designation granted by the US Department of Commerce to a specific building, site, or location. In effect, it lifts that specific designated zone out of the US for legal purposes, such as custom clearance and certain types of taxes. Properly used, it can be an incentive to attract manufacturing, processing, or assembling markets. Oregon Pacific thinks it is worth looking at. It can be used in two ways: 1} to bring in raw materials or components of some assemblies from an off-shore country to process or manufacture the product for re-export to a third country, and; 2) for domestic materials or products to be shipped to off-shore markets. MINUTES--Eugene City Council/OPEDC May 23, 1983 Page 3 e If a foreign trade zone application has feasibility in this area, Oregon Pacific would like to see it tied to the metropolitan area and to the Airport. It would have to be done in conjunction with a foreign trade zone established at the port of entry. The choice of ports would include ports such as Coos Bay. VI. DISCUSSION Councilor Lindberg said that he had recently been to an SBA 503 workshop where participants were warned about multi-purpose organizations setting goals in conflict, and decisions being made too slowly by boards. He also had a ques- tion concerning the difference between a port or free port and a trade zone. Mr. Stewart pointed out that a port district had the authority to tax and a trade zone did not. Councilor Wooten stated that the City of Eugene has been actively working with a seven-county group mentioned by Mr. Anderson on the SBA 503 project. The City of Eugene is on the verge of membership in that organization. Also, the Economic Subcommittee of the council has worked through staff to create a revolving loan program for small businesses, with initial funding coming from the Community Development funds set aside for that purpose. A third program the City has been working on concerns cultural destination point planning activities. In regard to foreign trade zones, Ms. Wooten said that she spent some time with John Anderson and John Martin of Coos Bay, and there are still many unanswered questions. Mr. Martin will be organizing a workshop on foreign trade zones. e Mr. Holmer asked how many foreign trade zones are there now in the US. Mr. Anderson responded that in the early 1970s there were fewer than 50 of the private warehouse types. Since about the mid-1970s, there has been a tremendous increase in the number of applications and approvals and in the innovative types of trade zones. Lincoln, Nebraska, created a zone for the Kawasaki Motorcycle Company. There are now about 1,000 foreign trade zones. Mr. Ohm asked if there was a clearcut agreement on who is doing what in terms of recruiting. Mr. Eveleth, Mr. Anderson, and Mr. Gleason all felt that recruitment activities were going well since the last meeting. Mr. Gleason stated that with the increased participation in the BAT program and with the Ambassador Program, he felt good about linkage, sorting of potential prospects, and how to handle them. Computers are helping to perfect the program. Councilor Smith asked questions concerning communications between Oregon Pacific and the Eugene City Council and staff in regard to contacts from prospective businesses. John Anderson answered that there was communication, that each case was dealt with on an individual basis, and that the staff should be relied upon to use professional judgment and sense. Ms. Smith asked if there were any joint efforts on tourism available. Mr. Anderson said that Oregon Pacific was involved with a tourism project until September, but they did not have the long-term commitment to tourism that they had to facility development. Councilor Obie commented in favor of moving forward to understand what a foreign trade zone is and how to achieve it. He asked the City Council to comment on the idea of having Oregon Pacific act as Eugene's agent in developing the capability. Ms. Wooten said she was optimistic about the idea, but there were e MINUTES--Eugene City Council/OPEDC May 23, 1983 Page 4 e e e still many questions to be answered before a decision should be made. Mr. Holmer felt that foreign trade zones are well worth looking at. Mr. Ohm stated that one of the problems with our area is not being able to offer any particular economic advantages, and a foreign trade zone might be a very attractive incentive. Mr. Keller directed Mr. Gleason to put together infor- mation on foreign trade zones for the council's information. Mr. Holmer asked if there is anything else more exotic than a foreign trade zone to look at. Mr. Anderson said no, that there is only one foreign trade zone in this area, in Portland, that it is feasible in our area, and that we should proceed agressively and quickly. Mr. Obie stated that neither group has a direct outreach recruitment program going on. He asked if Oregon Pacific is in a position to contract with the City of Eugene to make "x" number of contacts in Eugene's behalf. Mr. Anderson said that it is programmatically very feasible to market a specific site. The issue that it presents for Oregon Pacific is, how can Oregon Pacific rationalize that and still market the same attributes of surrounding areas. Ms. Wooten wanted to know how the City of Eugene could be assured that the services contracted for would limit the prospect to the City limits. Mr. Anderson answered that one has to be pragmatic and realize that it is very rare that someone coming into an area won't look at every site available. Mr. Ohm said that we are in an econo- mically interdependent area, and even if a prospect located in a nearby location, it would help the overall economy. Mr. Keller said that he was in a quandary because it is the City of Eugene's money, and how do you step forward and say we are doing it for the Metropolitan area. He said that our obligation is to the City, and the City wants the contract work to be very fairly specific. Ms. Wooten said that the three areas the council subcommittee has discussed at length where services could be contracted are: 1) Export trade opportunities--It may be in the form of technical assis- tance to a specific number of Eugene businesses or a foreign trade zone feasibility. 2) Wood products--How could we contract for services to assist local wood product manufacturers with second generation products and markets? 3) Industrial recruitment for those firms of over 100 employees. Mr. Anderson spoke to Mr. Keller's concern, saying that the important thing is to get prospects here to look at Eugene. Any site locater that comes may have 15 other sites that he/she will also look at. Mr. Holmer asked either Mr. Hoyt or Mr. Amundson if the Chamber of Commerce could be contracted with for recruitment. Mr. Amundson answered that the Chamber of Commerce did not have the staff for large-scale recruitment, and that Oregon Pacific was more suited for that work. He added that he thought it unfair of the City of Eugene to expect Oregon Pacific to produce recruiting for the City specifically. He thought Oregon Pacific should pursue the areas of foreign trade zones and wood products rather than specific sites. He said the economics of the region does not flow by the lines of the map. MINUTES--Eugene City Council/OPEDC May 23, 1983 Page 5 e e - Mr. Milligan said that there are two dimensions to the problem. The first is getting people to the area, and the second is dealing with them while they are here. He suggested that Oregon Pacific's expertise in dealing with a prospect could be marketed to whomever in the area needed the service. Mr. Alltucker agreed that it is important that prospects be treated profession- ally. If the City of Eugene pays to bring someone here, Oregon Pacific can be paid to make the arrangements and to take care of them in the city. If the prospect chooses to look at other areas, then the charge for that time can be allocated to those other areas. Mr. Obie stated that what he wants is to buy a marketing program for the City of Eugene. He wants somebody knocking on doors in Silicon Valley. Mr. Anderson said that what has been talked about is a question of agency and exclusive agency. If there is a specific site in the city to market, Oregon Pacific can do that. It would be a problem if the City said that Oregon Pacific couldn't contact those same people for somebody else. Ms. Wooten stated that she feels positively about the City's Economic Diversi- fication project and that there have positive, measurable results. She expressed concern about seeing tangible results with Oregon Pacific and the Chamber of Commerce, and asked two questions of Oregon Pacific: l} What is Oregon Pacific's industrial recruitment strategy for large firms? What has Oregon Pacific done to date and when does it expect to propose a strategy that could include not only Eugene but the other local governments? 2) When Oregon Pacific says it is working on the Research Corridor, what does that mean? Who is doing what job, and what does it mean in terms of developing prospects? In response to Ms. Wooten's question on strategy, Mr. Anderson answered that Oregon Pacific is relying in part on Fanta's analysis of economic screening which says there are 16 basic SIC's that could practically operate in this region. That group was narrowed to five with a fairly high probability of success. Oregon Pacific is pursuing those SIC's with direct mail and a few with space advertising. Oregon Pacific will use cost-profit analysis to support those contracts. A second strategy is to employ a network which includes hundreds of organizations with world-wide connections and who are in the business of looking for investment places. They have been briefed and others will be briefed in terms of this area's assets and opportunities. They will be secondary agents and will refer back to us. The second question deals with timing. Our interim base document is completed. Oregon Pacific will begin space advertising in June and July in Pharmaceutical Executive magazine with full-page ads. As far as the High Tech Corridor, there are at least three different agendas. One is municipal government relationships, which Oregon Pacific thinks is very constructive. The second is for the educational systems, and the third is using the corridor for site-specific location for recruiting. Mr. Anderson stated that Oregon Pacific does not seek ownership or control of the marketing of the corridor, nor does it need to seek permission to aggressively pursue the marketing of the corridor. MINUTES--Eugene City Council/OPEDC May 23, 1983 Page 6 e e e Mr. Lindberg said that before money is spent, the City should answer three questions: 1) Are we increasing the City of Eugene's tax base? 2) Are we increasing employment in the city? 3) Are we increasing income? He also expressed concern about big companies not having a long-term commitment to areas where they locate. Mr. Keller gave the chair back to Mr. Stewart for some final remarks. One thing Mr. Stewart wanted people not to overlook was that a bird in the hand is worth two in the bush. Mr. Stewart said that tough problems face business in dealing with LCDC, the high income tax situation, and with not spending enough for good education. Mr. Alltucker commented on how this legislature is not helping the business climate. :;~~~i.n_g was adjourned. /' ",(,--,:" "- (Recorded by Marion Wilson) MW: jw/CM27 a4 MINUTES--Eugene City Council/OPEDC May 23, 1983 Page 7