The Tribune Democrat, Johnstown, PA

Business

June 9, 2013

Too many tools? Economic-development groups starting to overlap

— Doug Lengenfelder admits that 45 economic-development organizations would seem like enough – even for financially distressed Cambria County.

That's why the president Cambria County commissioner first approached one of the existing organizations when commissioners proposed bringing the federal foreign trade zone program here.

The list was included in a report to the previous county commissioners by consultant Emily White of Duane Morris Government Strategies. It includes a wide range of organizations working in various roles to create jobs and promote business within Cambria County.

Since the county’s John Murtha Johnstown-Cambria County Airport owns property ideally suited for international business development, the airport authority seemed like the logical choice to manage a foreign trade zone, Lengenfelder said. The authority was already involved in trying to create an aviation business park.

The foreign trade zone program provides delayed or reduced duty payment on international products that are at least partially made in the local region.

But after working for several months with the airport authority, Lengenfelder says it became clear that yet another organization would be required to lead the specialized project.

More details of the proposed county economic-development authority will be announced at Monday's county commissioners' meeting, but Lengenfelder says the new organization’s board will focus on identifying businesses that could benefit from the foreign trade zone and other incentives available here.

Lengenfelder says he considered Cambria County Redevelopment Authority, Cambria County Industrial Development Authority and independent bodies such as Johnstown Area Regional Industries, but any of those would have to develop a new subcommittee and staff to oversee the program.

But each organization is already providing some valuable services, which the new authority won’t have to develop, he adds.

“If one, by itself, is not the answer, then why would we want to say, ‘No, I don’t want another authority?’ ” he said. “It is not like they are in competition. In fact, by law, they can’t be.”

Moreover, Lengenfelder said the Duane Morris consultant’s list of 45 economic development agencies is misleading because it includes many statewide programs, tourist promotion groups and those with a limited scope of activities or focused geographic region. Only a handful are working countywide, and they are also specialized, he said.

Lengenfelder sees the proposed economic-development authority as representing the unified voice for Cambria County. But there are no plans to merge other groups under the new authority’s umbrella.

The existing organizations all perform important functions, Lengenfelder said, contrasting JARI and the Greater Johnstown/ Cambria County Convention and Visitors Bureau as an illustration. Both are on the Duane Morris group’s list.

“The CVB creates economic activity within our county,” Lengenfelder said. “JARI wouldn’t dream of doing business the way the CVB does. They both have their own way of doing business. I wouldn’t expect JARI to draw in tourists, but I want them both here doing what they do.”

Although they are not dismissing the need for a countywide economic-development authority, two prominent businessmen are adopting the state of Missouri’s motto:

“Show me,” William Polacek and Mark Pasquerilla say.

Polacek is president and CEO of JWF Industries and serves as chairman of the airport authority.

Pasquerilla is chairman and CEO of Crown American Hotels and chairman of Greater Johnstown Regional Partnership, the nonprofit group that commissioned the Duane Morris study.

Polacek points to the number of agencies trying to leverage business-development funding.

“We certainly don’t need to add another to the equation,” Polacek said. “I could be wrong. They haven’t set the charter up, so if they want to focus on something I’m not seeing …”

Pasquerilla believes that the duplication inferred by the Duane Morris report is “exaggerated,” but he is not ready to embrace a new authority. He is concerned that politics are driving the initiative led by commissioners Lengenfelder and Mark Wissinger, both Republicans.

“If they really need an economic-development authority to run the foreign trade zone, that’s fine, but we don’t need to create partisan warring economic-development agencies,” Pasquerilla said. “I’d oppose that adamantly.”

Leaders at JARI and the county’s industrial development, redevelopment and airport authorities agreed that, without a major restructuring, they would not be able to take on the foreign trade zone project.

“We are really a small organization,” Executive Director Ken Mesko said from the industrial-development authority office.

Although the authority board includes a number of prominent business leaders, Mesko and an assistant comprise the paid staff for both the authority and its associated, but independent, Cambria County Industrial Development Corp.

The corporation owns and operates Cambria County Industrial Park and its South Park Complex outside Ebensburg. The original park is home to CAMCO, HealthSouth Rehabilitation Center, McAneny Brothers Inc., Pandya Computers Inc. and S&T Bank, among others. Gamesa is the prime tenant in the new South Park Complex.

The authority, meanwhile, provides a conduit for businesses to receive low-interest government loans to start up or expand operations and create jobs, Mesko said. It works closely with other organizations, including JARI, to connect businesses with services and other available help.

“We always coordinate the other organizations,” Mesko said.

The county redevelopment authority has never been directly involved with trying to attract businesses to the region, Executive Director Larry Custer said.

“Our mission has always been working with municipalities on housing and community development matters,” Custer said at the authority’s office in Ebensburg. “Mostly, we assist them in making applications for funding and administering the programs.”

Many projects promote economic development indirectly by expanding water and public sewer systems into new areas.

Many say JARI’s decades of experience in economic development have made it the first stop for virtually any business coming to the region.

“The center of economic development for the region is JARI,” Polacek said.

President and CEO Linda Thomson says the nonprofit organization strives to connect businesses with any programs available – including those offered through other organizations and agencies.

“All of us over the years have done our best to work together and not duplicate,” Thomson said. “We work together to make sure the client gets the best services available through the network.”

The network includes others on the Duane Morris consultant’s report, including the state Department of Community and Economic Development’s Ben Franklin Technology Partners and Ben Franklin Venture Investment Forum. The Ben Franklin helps entrepreneurs access outside investment and provides training.

Thomson said JARI is ready to help any business ready to take advantage of the foreign trade zone with the services it always provides, such as workforce development, site location, defense contracting procurement help, financial consulting, business plans and government regulation information.

Johnstown’s economic-development coordinator agrees that the network of agencies work well together.

“Each organization is structured differently and has different goals and objectives,” Josh Summits said at his office in City Hall. “The overall goal is to attract business and help the region’s economy.”

Specializing can be a good thing, he added.

“If there are small niches, we can fill those,” he said. “The more we help each other and the more connected we are, the easier things get done – instead of working in a silo.”

As far as competing for funds, Summits admits there may be some overlap, but each organization is set up to tap into specific sources.

The city’s office relies on federal Community Development Block Grant and Housing and Urban Development streams, while the Johnstown Redevelopment Authority relies on proceeds from its sewer operation and project-specific state grants.

Pasquerilla is taking some credit for the county’s expanded economic-development efforts, saying the Duane Morris study that came out in September 2011 has been a catalyst.

 “I think the study was a big success,” Pasquerilla said. “The county has always been a follower in economic development in the past.”

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