The CEO Resource - Summer 2019
Competition Gets Tougher With New State Level Economic Development Leadership
A number of states are cranking up their competitive posture and capabilities thanks to new executive leadership of their state level economic development organizations. Of particular note, is JP Nauseef, the new President and Chief Investment Officer at JobsOhio. This former Dayton corporate executive and economic development practitioner, along with Governor Mike DeWine, underpinned by the enviable deal making financial horsepower at JobsOhio, are going to propel economic development success to new levels that may well make heads spin in places like Texas, Georgia, Tennessee and North Carolina. A new level of creativity, partnership and can do attitude will be surprising to the competition, but not to those who know JP Nauseef.
Ohio is raising the bar. Other states are on notice to step up their game.
Bon Secours Mercy Health Expands Its Cincinnati Main Office
As Mercy Health integrates its merger with Bon Secours, a similar major Catholic health system on the East Coast, KMK Consulting has been honored to once again work with this major health system in its site selection process ultimately concluding with a major expansion of its Cincinnati home office in Bond Hill. This multi-month process, involving Maryland and Virginia as significant Ohio competitors, creates 500 new jobs and $50 Million in new payroll for the City of Cincinnati. When this major expansion is completed, the Bon Secours Mercy Health campus in Bond Hill will be home to 1,750 employees with an annual payroll of $175 Million.
On June 24, 2019, Ohio’s Development Services Agency approved a 12 year Job Creation Tax Credit Agreement and a major capital investment grant, contingent on City of Cincinnati support, which will be finalized later this summer.
Bon Secours Mercy Health is the largest health system in Ohio with 34,000 employees with its largest region of five full service hospitals in Greater Cincinnati. It’s East Coast footprint with about the same number of employees encompasses hospitals from Virginia to Florida. In the past six months, BSMH also announced a major partnership with Ohio State Medical Center and also acquired Bon Secours Ireland and its 3,000 employees, the largest private health system in Ireland.
This project impact is also significant for KMK Consulting as we have worked on other site selection/incentive projects for other clients in all of the East Coast states now within the BSMH footprint.
The Silver Bullet to Virginia's Winning Amazon's HQ2
As the economic development world and the plethora of communities underpinning the 238 proposals trying to compete for Amazon’s HQ2 have learned their lessons and have moved on to deal with other business growth opportunities, Northern Virginia’s National Landing, straddling Alexandria and Arlington, is cranking on all cylinders since Northern Virginia was announced as the new Amazon headquarters.
Jim McGraw met recently with his friend Stephen Moret, the President and CEO of the Virginia Economic Development Partnership who led that effort to discuss with him how he did it, particularly when none of Virginia’s locations submitted in its 27 pound proposal was picked to win.
According to Holly Sullivan head of worldwide economic development at Amazon and the HQ2 chief negotiator, “the primary driver through this entire project was talent. Not just day one talent, but the opportunity to evaluate and sustain a talent pipeline.” Stephen said that as far as they know, no other state made higher education the focus to the extent proposed by Virginia. It was the first time in the state that they have done something of this scale partnering economic development and education.
Moret reached out to higher education leaders across the Commonwealth to determine how much they would be willing to grow their tech talent programs. All public colleges and universities as well as community colleges across Virginia were invited to help craft a bold vision for a historic tech talent pipeline initiative. Their plan promises to double Virginia’s tech graduates investing up to $1.1 Billion in new state support to expand the talent base by more than 1,700 degrees annually in computer science and related fields. They have also committed to launching a Tech Campus just for additional tech talent. This $1 Billion graduate studies project will be located in Alexandria, walking distance from HQ2 and a massive stake in the ground for this new way of thinking. And the vision also encompasses K-12 particularly for women and underrepresented minorities. Virginia already ranks fourth nationwide for the percentage of students who have passed an AP STEM exam.
So Virginia wins on a state wide collaboration strategy encompassing all of higher education all focused on tech talent. Clearly they started with an amazing foundation. The greater Washington, DC area is the most educated region in the nation with nearly 50% of the population 25 and older holding at least a bachelor’s degree. The region produces more computer science graduates than any other metro area in the country with the second most tech workers in the US including the third largest pool of software developers.
According to Virginia Tech’s Theresa Mayer, the University’s VP for Research and Innovation, “the strategy Stephen Moret took focusing on higher education was an incredibly strategic move. We took input from Amazon and in real time adapted the plan to be more responsive to their needs. It’s about thinking and delivering where you see the leading tech companies going.”
The economic development war for talent rages on. Amazon and Virginia have pushed it to a new level.
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James J. McGraw, Jr.
President, Chief Executive Officer
Thomas G. Seward, Jr.
Director, Corporate Location Strategy