The million-dollar sell: cities reel in companies with PR - Cities and regions are pumping millions of dollars into attracting new businesses. As Marc D. Allan discovers, PR is becoming an important part of that effort

Three years ago, Bob Krieger launched a Web site (www.acn.net) that labels itself ’the world’s first pure online site selection and economic development firm.’ The American Community Network site effectively eliminated the research time and guesswork that goes into planning a business expansion or relocation. The Web tool reduces cities and towns to a collection of objective data that can be compared and searched to find the perfect destination.

Three years ago, Bob Krieger launched a Web site (www.acn.net) that labels itself ’the world’s first pure online site selection and economic development firm.’ The American Community Network site effectively eliminated the research time and guesswork that goes into planning a business expansion or relocation. The Web tool reduces cities and towns to a collection of objective data that can be compared and searched to find the perfect destination.

Three years ago, Bob Krieger launched a Web site (www.acn.net) that

labels itself ’the world’s first pure online site selection and economic

development firm.’ The American Community Network site effectively

eliminated the research time and guesswork that goes into planning a

business expansion or relocation. The Web tool reduces cities and towns

to a collection of objective data that can be compared and searched to

find the perfect destination.



It’s true that numbers do tell some of the story when one is looking to

see which area has lower taxes or a better-educated population. But when

the figures are basically equal - when the potential workforce is

equally qualified, when the tax incentives are roughly similar - what

tilts the decision of where to locate a business? Public relations, of

course.



’If all the communities were basically about the same on what they

offered - which is not unusual - then the difference becomes which one

the business likes,’ Krieger says from his office in Memphis. ’And how

do you create that image with these guys or with these women, from out

of town? Frankly, every city would put on its best show. And that is

pure public relations.’



The competition for cities and wider regions to attract businesses is as

intense as ever, experts say, with an estimated 12,000

economic-development organizations vying for the roughly 500 annual

corporate moves/expansions that involve 250 or more jobs each. (In

Texas, 440 communities take advantage of a law that allows them to

charge up to a half-cent sales tax to go toward economic development,

raising a total of dollars 230 million annually.) That competition means

communities are using PR more than ever before to make themselves look

as attractive as possible.



The public relations efforts go well beyond the usual wining-and-dining

routine - although that’s certainly part of the equation. More than

that, PR is being used to improve the images of cities and towns hoping

to lure development.





CEOs name their bait



In a survey by New York-based Development Counsellors International, 427

US and European business leaders were asked what three factors

influenced their perception of a state’s or region’s business climate.

The top answer was dialog with industry peers (69%), which has led

locales such as Portland, OR to create ’ambassadors bureaus’ - groups of

CEOs who assist in business recruitment.



Next in the survey was articles in newspapers and magazines (63%). That

has led to major efforts to place positive stories in national

publications that will be seen by executives who decide where to move

their businesses.



’It’s difficult to determine cause and effect, as in ’I read this

article and we decided to move,’’ says DCI president Andrew Levine,

whose father founded the company 40 years ago to handle economic

development and tourism PR. ’What you’re dealing with here is not the

purchase of a dollars 2,000 computer but in many cases a dollars 20

million move or expansion. It’s a combination of several different

things happening at the right time.’



That said, Levine’s firm has accounts in 35 states and three dozen

foreign countries, and he’s seen hundreds of stories that have made a

difference.



He talks about a New York Times piece that helped bolster the image of

Charleston, SC as the city was trying to attract businesses to its

abandoned US naval yard. A story in Continental Airlines’ magazine,

Hemispheres, touted Irvine, CA as ’Motown West’ for its ability to

attract automakers (see sidebar).



’We don’t know the full extent of the influence of PR,’ says Paul

Hiller, managing director of Destination Irvine, a partnership between

the city, chamber of commerce and 40 private-sector companies. ’But we

know from specific projects that it is effective, it is working and

we’re getting a lot of feedback that way.’



It’s a fairly simple equation: media attention equals feedback and

feedback equals sales leads and that yields sales - perhaps not right

away, but definitely down the road. That’s why representatives from the

Kansas City Area Development Council were ecstatic in June when Wall

Street Journal columnist Peter Grant wrote a small piece about the 20

million square feet of underground warehousing and transportation in the

city.



Bob Marcusse, president of the Kansas City group, says the result will

be that ’there are going to be some folks around the country who will

learn something about our community that they didn’t know before. Some

of those people are going to say, ’You know, that is exactly what I’m

looking for. I didn’t know that was there.’ And it’s going to turn into

a business development opportunity. But more importantly, when there are

consistent stories and articles over time, we’re going to build an image

that in the long run is exactly what we want.’



The Journal story took several months to cultivate; it took a dot-com

company undertaking a project to get Grant interested (online contest

firm Virtumundo chose to locate in KC because of the cheap storage for

the prizes it gives away). But it’s one of several ways Kansas City and

other cities are approaching economic development public relations.





Views you can use



Communications for economic development often involves researching how

the business community views a city, finding out what’s special about it

and developing the message. For example, Levine says that when

Philadelphia realized that many people view it as a pharmaceutical

center, it came up with ’Pilladelphia.’Similarly, because of FedEx being

headquartered in Memphis, the city billed itself as ’America’s

Distribution Center.’ Then there are the audiences to reach, especially

local businesses, industry groups and media.



In addition to local and national media outlets, the economic

development and ’siting’ professionals have five trade magazines that

they pitch: Area Development, Business Facilities, Site Selection,

Expansion Management and Business Expansion Journal.



Although the success of economic development PR is gauged largely

anecdotally, Levine says that for every dollar a community spends with

DCI, the agency tries to get dollars 3 in ad equivalency of positive

media coverage.



Frequently, economic-development pros will use their PR staffs to

orchestrate interview sessions in major cities with the hope of enticing

reporters to visit. Martin Mini, Kansas City Area Development Council’s

senior vice president of marketing and communications, says that for his

agency, these trips are always preceded by a strategy session in which a

message is formulated. In past years, they’ve pitched general ideas,

such as the growth of hi-tech in Kansas City, and specific stories, like

the local billionaire who’s leaving his fortune to a major

cancer-research center being built in the area.



Kansas City also has a news bureau that informs local and national media

of its success stories. Columbus, OH is another region with its own news

bureau - one which attempts to raise the city’s profile on a national

level. ’It maintains a relationship with key business writers and media

organizations nationally so that when things are happening in our

region, there’s an outlet for them to share that information,’ says Roy

Williams, executive vice president of the Greater Columbus Chamber of

Commerce.



’It shares not only business information but other information with that

national network of industry trade publications, national periodicals,

newspapers, etc.’



The latest success story Columbus’ news bureau had to tell about was The

Gap opening an e-commerce fulfillment center there to fill catalog

orders, creating 2,500 jobs. And that was only the most recent coup in

central Ohio’s effort to attract e-commerce shipping business:

Submitorder.com and several optics companies have already located

there.



Beyond positive stories, economic development PR efforts also may

include setting up meetings with potential investors or site-selection

consultants who help companies decide where to set up shop. Other

techniques include direct mail and telemarketing campaigns to find

businesses that plan to relocate, and even surveying corporate

executives to find out what they think of various regions.





Looking to the locals



DCI performs all those services. But Levine says he’s now seeing a lot

of money going away from ’smokestack chasing’ - trying to lure

businesses from elsewhere - in favor of helping existing companies

expand.



The Portland (OR) Development Commission, for example, offers companies

currently located in the region a forgivable-loan program. If the

business creates a certain number of jobs paying at least double the

minimum wage (currently dollars 7.50 an hour in the state), the loan of

dollars 2,000 per job becomes a grant.



Another major change Levine expects to see is less competition for

businesses and more for workers. The PR efforts will shift, at least

partly, to attracting qualified, skilled employees. When a region can

boast of having an educated, prepared workforce, businesses will come.

Robin Roberts, director of economic development for the Portland

Development Commission, says business visitors to her city have

requested meetings with human-resources directors at Portland companies

to try to gauge the quality of the local workforce.



’If you want to attract technology companies, you have to have the

workers,’ Levine says.



Ultimately, though, whether it’s attracting companies, convincing

businesses to expand or getting workers to relocate, cities will

continue to polish their image and look for anything they can do to

one-up the competition.



’It’s a long-term game,’ Levine says. ’Changing the impressions or

creating the impressions of a region takes time. It’s very difficult to

do this in months or even years. One of the shortcomings of some of the

economic development organizations is they’ll try this for a short

amount of time and not understand why things haven’t changed

rapidly.’



The reason they’re impatient is simple, Kansas City’s Marcusse says.



’The stakes are so high, because success means millions of dollars in

taxes, it means wealth creation, it means jobs. It is the lifeblood of a

community.’





ECONOMIC DEVELOPMENT: THREE TALES OF THREE CITIES



Irvine, CA



Paul Hiller likes to tell ’the Irvine story.’ And why not? It’s a tale

of riches.



Sixteen automakers, from Lincoln Mercury to Mitsubishi, have their

design operations in his city, earning it the moniker ’Motown West.’

Taco Bell, Broadcom and Western Digital are some of the companies

headquartered there.



As much as Hiller enjoys relating Irvine’s success story, he prefers

when others do it. So Destination Irvine, the public-private economic

development agency of which he’s managing director, depends heavily on

PR to get the word out about life and work in this city 45 miles south

of Los Angeles and 85 miles north of San Diego.



’PR is proving to be one of our most effective methods of getting to

companies,’ Hiller says. ’We’ve had several companies specifically

mention articles or publicity in terms of why they contacted us.’



The rest of the Irvine story helps sell the city. Irvine is an affluent

30-year-old planned community of 135,000. The FBI rates it as one of the

safest places in the country. It has an extremely highly educated

workforce - 62% of the population is college-educated, making it ’very

much a white-collar community’ - with a growing number of professional

and technical people. Its students rank among the best in the country on

the SATs, Hiller says, and it’s home to one of the branches of the

University of California system.



Plus, unlike most of California, this city is only half-built. Twenty

years from now, the population is likely to be more than 200,000, but

housing costs are one-third to one-half of those in San Francisco. It’s

adjacent to the John Wayne Airport, making it convenient for

travelers.



And if that weren’t enough, it’s three to four miles from the beach.



’There’s a lot going on here, and what’s been most effective have been

the articles by writers who’ve come here to take a look around,’ Hiller

says. ’They may be writing about technology development or the broadband

industry or the emerging auto presence on the West Coast. They see

Irvine where some of that is taking place.’





Kansas City



Having a reputation for great blues and barbecue apparently wasn’t

enough for Kansas City. In the early ’70s, the city began putting

together a major economic development initiative called the Prime Time

News Bureau.It was designed to spread the word about KC’s other

attributes, including the new sports stadiums and airport and Hallmark’s

massive city-within-a-city, called the Crown Center.



’They used the press to upgrade the image and update people’s

perceptions,’ says Martin Mini, SVP of marketing and communication for

the Kansas City Area Development Council, the private-sector marketing

umbrella for this market of 2 million people straddling two states.



Some 30 years later, the effort continues - apparently successfully.



The 15-county region is ranked among the top 10 metropolitan areas for

job creation, bringing in State Street, Gateway, a new Harley-Davidson

assembly plant, Electronic Data Systems and even a NASCAR speedway

(opening in 2001).



Still, like many cities in the Midwest, Kansas City remains something of

a secret outside its own region. And that’s not necessarily a

negative.



’We probably have somewhat of a neutral image,’ Mini says. ’We have more

of a blank canvas to mold or craft in people’s minds what our city

represents. Our business really begins with perception. What people

think of cities matters as much as do the bottom-line facts and figures

and statistics and research data. We strive to create a first-class

impression, an accurate perception of what Kansas City is, in the

national and international business press.’



Whether meeting the press in large markets to pitch stories about Kansas

City or using its Web site (www.smartkc.com), Mini’s agency is

aggressive.



Two or three times, it’s even fed USA Today information for one of its

’snapshot boxes’ that showed KC in a particularly good light.



The point, Mini says, is that ’we believe people have to feel as good

about a city in terms of its image and reputation as they do about a

piece of real estate and electricity rates or the labor force.’





Portland, OR



They’re busy at the Portland (OR) Development Commission - busier, in

fact, than they’ve been since 1993, director of economic development

Robin Roberts says. From the expansion of computer-chip maker Intel to

the forgivable-loan program that’s encouraging small local firms to

create new jobs, the business climate is bustling in this region, home

to roughly half of Oregon’s 3 million people.



Portland caught on to the need for economic development after Oregon’s

two major industries, agriculture and timber, were pounded during the

late ’70s/early ’80s recession. The state identified 14 key industries

to go after, from professional services and biotechnology to hi-tech

software and aerospace, and began making the effort.



PR plays a huge role, Roberts says. ’I think buying big ads in magazines

is great if you have a huge budget. We try to be a little more

targeted.



We try to think more like a CEO would think, and they’re probably going

to be more interested in hearing from other companies. I think the media

relations piece, articles about why we’re the most wired or have great

marine access to Asian markets - those kinds of articles are really

important to us.’



The commission does that through its ’ambassador network’ - the group of

area CEOs that assist in recruitment efforts, placing newspaper and

magazine stories and making sure the kind of companies they want to

attract know what Portland has to offer.



And they stress the quality of life, such as the housing availability in

downtown Portland, which Roberts says is perfect for hi-tech companies

where the employees burn the midnight oil. People are on the streets or

walking along the waterfront and restaurants are packed. It’s a 24/7

city.



’Every town you talk to is going to say they have a great quality of

life,’ Roberts says. ’But the question is, are you talking about

housing, schools, recreation, climate, health and safety, cultural

opportunities?



It means something different to every person. So when we talk about the

quality of life in Portland, we try to focus on what makes us unique.’



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