Doug: From Rea & Associates studio, this is unsuitable, a management and financial services podcast for entrepreneurs, tenured business leaders and others who are ready to look beyond the suit and tie culture for meaningful measurable results. I'm Doug Houser. On this weekly podcast, thought leaders and business professionals break down complicated and mundane topics and give you the tips and insight you actually need to grow as a leader while helping your organization to grow and thrive. If you haven't already, hit the subscribe button, so you don't miss future episodes. And if you want access to even more information, show notes, and exclusive content, please visit our website at www.reacpa.com/podcast and sign up for updates. One Columbus has shared their vision for the Columbus region to be the most prosperous region in the United States, growing businesses, preparing communities, and more. Today Chip Holcombe, director of investor relations at One Columbus is going to give us a little insight into the One Columbus plan for the region. Welcome to unsuitable, Chip.
Chip: Thank you, Doug. A pleasure to be here with you.
Doug: Great to have you on. And I always love talking to you because you're so positive obviously and bullish about what's going on in central Ohio, despite all of the headwinds and challenges, obviously with COVID-19. Let's kick it off, talk to us a little bit about the One Columbus, the organization, and the work plan that you guys have, and what this means for central Ohio.
Chip: Glad to do so. I'll just rewind a little bit. We're in the 11th year of this journey, we were formed in 2010 to be the regional economic development organization and really drive economic development much differently than we had in the past. We set some very lofty, hard target goals during our first 10 years, we wanted to have an impact of 150,000 net new jobs, eight billion of capital investments, and increased per capita income by 30%. And when we launched this, we visited with a lot of business and community leaders and they all said those are pretty aggressive goals. And we're certainly pleased to report that two years before the end of the decade, in 2018, we reached and surpassed all of those hard target goals.
Of course, at that point, everybody said, well of course we did. We were able to really change the dynamic in this region. As we look to the next 10-year strategic plan, as you had mentioned, we would like to become the most prosperous region in the country. And what we mean by prosperous is, all of our citizens in their economic and social well-being. Lots of people did great in the last 10 years. We want to make sure that we close gaps and we bring everybody aboard and we can have a broader impact for all the residents in our 11 county region to improve not only their economic but social well-being. What that means, we're going to own what we own and that is on the demand side, we want to continue to help companies grow.
We want to recruit the best companies in the world to locate here, to invest and create jobs. We're in demand so we want to create jobs for our residents, but we're also going to need local governments to be smarter and more innovative. We need our transportation partners to provide additional services, to get workers from home to the job, to the workplace. We're going to need the healthcare industry and really it's sort of an all aboard, all in, effort to everybody improve and then we can really sort of stack hands and hopefully achieve that recognition as being the most prosperous region in the country.
Doug: Yeah, it's really amazing. I remember being at the kickoff at the convention center, at the time you guys were branded obviously Columbus 2020. And hearing that vision and I have been in central Ohio for over 30 years now, it's just astounding of the progress that we continue to make. I think people take it for granted, but we shouldn't, right? Because you guys obviously put in a lot of hard work in attracting businesses to this area and the region, and it's so meaningful because it feeds on itself. I mean, we've got the resources and the talent and the investment and time and people.
Chip: Well, you're absolutely right. And, I'll harken back, I'm of the age where I can remember Hertz versus Avis [inaudible] rental cars. And it's always stuck with me. Avis was like, we're number two, we try harder, and that's sort of emblematic about the Columbus region. People ask, "Well, who do you compete with? Do you compete with Cleveland, Cincinnati?" Not really, we're competing for head to head for jobs and investment with Indianapolis, with Raleigh, with Charlotte, with Austin, with Charlotte.
Doug: Nashville, probably a little bit too.
Chip: Nashville, for sure. Top tier markets, we're working ahead. And quite frankly, the difference between us and our counterparts in Austin, their economic development group, they wait for the phone to ring and it rings constantly. We have to, at least pre-COVID, get on a plane or train or an automobile every week and go throughout the country to tell the Columbus story. And it's a great story, we've got great assets, we're viewed as really a tech leader in the Midwest. So, we've got a great story to tell, but we have to initiate. As they say, we've got to go out and hunt for these prospects. We spend about a million dollars a year marketing and extolling the economic development virtues of our region. Nashville, Austin probably spend a third of that, because they're just so much stronger than ours.
Doug: That said, we're so well positioned here and I'm a sort of a closet economist myself and follow... You look at a lot of the projections, not only from you guys and we'll talk about your pipeline and projects and all that in a bit here. But, you look at the Mid-Ohio regional planning commission, even the state of Ohio, their own projections, we're expected to add a million residents to the central Ohio MSA over the next 20 years or so. I mean, you just think about that, the challenges that that creates as well as the opportunities. But to your point, we've got to deal with infrastructure and housing and medical, and all those types of things. As you look forward because of that, what are some of the biggest challenges that you see for our region?
Chip: Well, it's to avoid some of the mistakes that you were seeing in Nashville and Austin. Infrastructure has not been built out. In fact, there were two or three really great companies that were investigating the Nashville market, and then we're also begun looking at our market and they chose Columbus. Because they were able to take a look at the entire region and people can go from, they might live in Hilliard, they can still work in Gahanna. If you go to Nashville, you can't do that. Which means you're constricting your labor pool by 50%. And Austin is just a disaster in terms of infrastructure, roadways, housing, their city council, for instance.
Public policy and public leadership are awfully important to communities wanting to move ahead and they're really anti-business. We're blessed that we've got great public sector leaders, they sort of getting it. Of course, there's a competition between let's say New Albany and Dublin and Westerville, and that's great. But we've also sort of changed the mindset that we're all in it together. If Westerville happens to get a project, well, that's better than Louisville getting it because then nobody benefits. So, although we all wear the same color jersey, there's really good competition at the local level for projects, and that's good.
Doug: Yeah, that's great to hear. I mean, as you say, if a project is currently going to be best placed in wherever it is, maybe it's Aetna or new Albany, then the next one is going to be somebody else who will benefit locally from that.
Chip: Yeah. And early on, there was some suspicion from the local of our local partners. Well, we might play favorites. Well, that's really never been the case. It's all client-driven, in terms of the services that you provide your clients, it's whatever they need. So, if a company is coming in and investigating our market, they need 20,000 square feet of class A office space, we've got lots of options, lots of zip codes that we can show them. If they're looking for 150 acres of Greenfield site with rail siding and a deep water aquifer, we might have two, they're probably in Marion County and Pickaway County.
Hilliard doesn't have to worry about responding to that RFP, because they simply don't have that particular product. It's client-driven, it's product-driven, which leads me to the next point for our continued success and that is, helping our local communities build our products. If they don't have office parks, industrial parks, water, sewer, fiber high-speed to access, they're not going to win projects. A lot of that's really expensive, so we're working with them and our state partners and federal partners to make sure that we can continue to build the product that great companies are looking for.
Doug: Yeah, that's so important. As you said, you need that cooperation at all levels. Chip, talk a little bit about the pipeline that you see. Obviously, with COVID, it puts some things on pause, but what did that mean for you guys and for the region in terms of economic development and growth? What are you seeing out there?
Chip: Let me answer it this way. Pre-COVID, I'll consider that to be February of last year, our pipeline was about 110 active projects. Two types of projects. One would be a local company already here looking to expand, either new jobs or capital investment or a new facility. And then the second type of project would be a company that isn't located here that is considering coming into the market. We were at about maybe 110 then of course COVID hit, most of the projects just completely went on hold. Our team decided, well, we normally visit 150 to 200 companies a year locally to do assessments, to see what we can do to help connect them to programs, incentives, and so forth, we ramped that up to 425 visits.
We said, "Okay, let's make sure that our companies here locally if we can help them connect to PPP and other programs and incentives at the state level, that's the job we need to be doing now." As we look at our pipeline and we really haven't traveled much at all, if any, outside of our market. But, we've had probably 15 companies in the last four months, get on a plane, fly to Columbus and look at buildings and sites. And so, obviously, that's one sense of normalcy for us, so we feel good about that. Our pipeline right now is more robust than last February. So, we're at about 125 projects, probably 60% of those projects would be new to the market, so they're attraction prospects and 40% would be existing companies that are considering an expansion. That's exactly the ratio that we want and we're looking for.
Doug: That's great. That's fantastic in this current environment.
Chip: Yeah. One third and this has been pretty consistent over the last 10 years. One-third of our prospects are foreign-owned companies. Our big markets right now continue to be Japan, which's number one because of Honda and their downstream supply chain. And we've made some great in-roads in Western Europe in the last three to four years. We've located a couple of companies from Italy. Sofidel is a big Italian company located in Circleville. Maybe two years ago, the toilet tissue manufacturer, built a million and a half square foot facility, and it was a great soft landing from them. So, the Columbus region has a great reputation with Italian companies. We continue to nurture those relationships.
But also pursuing companies in Germany, the UK, Ireland, and Austria, as well as France. So, we're normally doing three trips a year to Europe to meet face-to-face, we're kind of doing it virtually now. We've had to adapt and Matt McAllister who's my colleague who manages Western Europe recruitment gets up at midnight and begins zoom meetings with those folks. So, we do continue to retain consultants in Europe who are qualifying companies and investigating, making sure which ones fit our profile and are looking to the United States as a potential market. They're doing a lot of the upfront qualifications, so when we talk to them, there's really something to discuss.
Doug: I think a lot of times too, that we get business owners that they're so focused on their own business in our market, sometimes they forget about the trickle-down effect that they see from all the successes that you're having. Whether they're in construction or manufacturing, technology, it doesn't matter. I mean, all of the related services and infrastructure that are needed because you're serving, bringing these new companies to the table, it's just tremendous, really. I'd love to see it.
Chip: Yeah. And we're fortunate because we have a pretty diverse economy here, there's not one sector that is more than 19% of our total economy or the state capital. So we've got a government component, which is important. And our regional economy has been damaged, there's no question about that. I think we will power through this better than most of the Midwestern cities. We've got momentum, we've got a strong innovation economy. But our retailers have really shed a lot of jobs and they've had to pivot and change their business models, this forced them to do it right now.
You're going to see the limited and the senior brands and ANF, they're going to make it, but they're going to look a lot different. So, lower headcount, but could be more profitable companies in the future, through e-commerce and other things. And of course, hospitality, it's really been decimated. But if you take a look at, we do some analysis of other markets, when you look at Las Vegas, Orlando, even Nashville that has such a heavy tourism component, those economies are going to take a long time to rebuild.
Doug: Well. And that diversity of our economy you spoke of is such a huge benefit. What are some of the things you guys do to try to be mindful of that, so we don't get too, let's say concentrated in any one area?
Chip: Yeah. Our targets really haven't changed quite a bit. We love manufacturing because they're value jobs and they spin off additional jobs in the marketplace. We certainly love finance and banking and insurance, very strong. What we're seeing is the emergence of FinTech and InsureTech companies. So, that would be the downstream suppliers to the large banks and insurance companies. And we've probably located 10 or 15 of those FinTech and InsureTech companies. Instead of just having another big insurance company, we're really trying to build out that ecosystem in that particular industry sector. One thing that you'll hear more about is the emergence of healthcare biotech, gene therapy. And a lot of that has come out of a nationwide children's hospital.
There's been three or four companies that have received incredible funding. So, cutting edge technology in healthcare. And there are physicians and scientists and companies coming to Columbus because we've become a leader in gene therapy, there'll be a lot more around that. Of course, when it comes to the industry sector that may be growing the fastest would be e-commerce, distribution, warehousing with Rickenbacker. And by the way, if you haven't been Rickenbacker lately, pack a lunch, drive down there and you'll be absolutely amazed how many million square foot buildings are down there. There's one after another, after another.
Doug: Yeah that's stunning, I've done that.
Chip: It's unbelievable. And Rickenbacker as kind of the inland port has probably tripled the number of cargo jets landings and takeoffs just in the last couple of years. So, a lot of people don't think that is a big engine for our economy, but it is.
Doug: And talk about, we're fortunate obviously, you talk about that distribution and warehousing thing. We're on that I 70 corridor, which is really a huge benefit for the region in terms of east-west movement of goods.
Chip: We do. And two class I railroads, a great highway system, and then Rickenbacker. With strong logistics assets, that tends to recruit those manufacturers because once they make it, they got them it.
Doug: Great point. Chip, you talked a little bit about the local communities and things like that, how you get them involved. I mean, what are some of the ways throughout the region that you do that getting all those communities involved, whether it's at the county level, municipal level, how does all of that work?
Chip: Yeah, there's an organization called MODE, M-O-D-E, Mid-Ohio Development Exchange. Our world is 11 counties and 24 cities. Every county has an economic development team, and it might be one person, it could be five people. Every city has an economic development practitioner or city planner, so that's kind of our group. And we meet with them monthly, sometimes twice a month, depending on what the issues are, for just sort of continued professional development, problem-solving. And again, we've really become one team regionally. The issues that might impact Marion might be completely different than Fairfield County. And that's fine, we work with them as a collective to improve everybody, but we deliver services to our local partners that are customized.
Doug: And you're happy to work with firms and companies, obviously, to consult with them and talk about expansion plans, all those things, right? Its sort of that rising tide lifts all boats, I mean, it's...
Chip: Right. We've got a team of seven project managers and they're out in the marketplace. In terms of the business retention and expansion strategy, the local economic developers I just referred to, are visiting companies in their jurisdictions. And if they uncover a company that says, "Hey, we might buy a company or we're looking to expand or add a new line." They'll typically pull us into that particular deal, we'll work together to find what are the programs, the resources, the incentives to help make that deal come to fruition. And particularly over the last couple of years, we've got a lot of the banks and then the accounting firms, and Rea we appreciate you guys being on our team, the attorneys, insurance folks, you're sort of our early warning system.
You would probably know if one of your clients is involved in M&A or looking to expand, they got a new contract. And what we're finding is our partners are just kind of giving us a phone call and say, "Hey, I've got a client, they're looking at 10 or 15 or 30 or a hundred people. What can we do to help that?" We're getting a lot more project opportunities because our partners have their radar on and their antenna up and saying, "Hey, wow, let's put a quick call into the One Columbus team to see how else we can help make this project a success."
Doug: Yeah, I think that's huge. Again, we're all in this together in the region, and the more success that we have, it certainly helps across the board. Chip, talk a little bit about what you foresee moving forward. If we look at say beyond 21 and past the pandemic and all of that, what do you see a little bit longer term for us?
Chip: We're super bullish on, I'll start with 2021. Our pipeline is really, really strong. We might have the best, first quarter we've ever had. We're going to make some major announcements in the next 60 days of big projects. We might do a billion dollars of capital investment this first quarter.
Doug: Wow.
Chip: In the near term, we're just trying to continue to be as aggressive as we can using different methodologies in our processes. But we're very optimistic and encouraged because we've got a critical mass in a number of key areas. I mean, Ohio State continues to build out the western lands, the research park is coming out of the ground, that, the peninsula. We've got critical mass, we've got a product that puts us in a great position. We still need continued great public sector leadership, making sure that economic growth and prosperity continues to be a big priority. We need to be business-friendly. Again, if we're competing with Tennessee and Texas, they don't have a state income tax or there are some things that maybe hinder us a little bit.
But the big levers and decision-making for economic development would be land, labor, and capital. We've got lots of land. We don't have Lake Erie just to the North of us, that the Cleveland market is a 180 market, we're a 360. So, we just go buy another, soybean field and put some stuff up. Although there's a big push on re-urbanization, re-development in our markets. Land is important, we've got that. We need to continue to make sure we've got the right product at the right time. We're going to be encouraging more speculative building, particularly on the industrial side.
When it comes to labor, we think we've got a competitive advantage with 125,000 college students going to school in our market at any time. With a great coalition of colleges and universities, we meet with them regularly, we connect them with our employers. And we're going to be adding additional resources to not only recruiting companies to come here but recruiting people. We want people to leave Chicago, leave Pittsburgh, leave New York, leave New Jersey, wherever, DC and come to Columbus because we've got great opportunities here. That's one of the values that we can deliver to our existing business community, is to make sure that that reservoir of talent continues to be strong.
Doug: I think that's huge. And it's just, it's so exciting. The opportunities and everything that we've got ahead for this region. I mean, it makes us all proud to be a part of the central Ohio community, and certainly thanks to you and One Columbus and everything you do, really appreciate all of the insight today.
Chip: Well, it's a lot of fun and the more good news is around the corner.
Doug: Absolutely. Great to hear and look forward to having you on again, Chip. Thanks again. If you want more business tips and insight or to hear previous episodes of unsuitable, please visit our podcast page at www.reacpa.com/podcast. And while you're there, sign up for exclusive content and show notes. Thanks for listening to this week's show. Be sure to subscribe to us, to unsuitable on Apple podcasts, Google podcasts, or wherever you're listening to us right now, including YouTube. I'm Doug Houser, join us next week for another unsuitable interview with an industry professional.
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