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Changes could be in works for EDC

Priority lists might alter panel's form, responsibilities

March 17, 2013|By DON AINES | dona@herald-mail.com

Editor’s note: This is one in an occasional series of stories on findings and recommendations in The Hagerstown and Washington County Economic Development Strategic Plan.

Coming Monday: A look at other economic development agencies and how they operate.


The Washington County Board of Commissioners has made some changes to the Hagerstown-Washington County Economic Development Commission’s organization and staffing, but it remains to be seen if more fundamental changes are on the way.

Last week, the EDC’s board of directors voted to recommend that the county commissioners create the position of strategic economic plan coordinator. The board also asked that the municipalities and economic development agencies and organizations in the county present a list of their top five priorities by the end of this month.

What those priorities are could determine what form the EDC takes in the future.

A majority of the five county commissioners said the EDC should remain a county department, at least for the time being, as opposed to being converted to a public-private partnership, a nonprofit corporation or some other model.

Timothy R. Troxell was dismissed from his position as executive director 11 months ago. Shortly thereafter, the EDC, through the Hagerstown-Washington County Industrial Foundation, known as CHIEF, hired the consulting firms Urbanomics and Leak-Goforth to draft the strategic plan. Unveiled in January, the plan was adopted by the EDC and accepted by the county commissioners, who asked the EDC to produce a list of five priorities.

The plan looked at several models for economic development agencies, including the existing commission model, all of which have pros and cons.


Development models

The consultants wrote that, in their experience, “the public-private partnership model is the most effective, in that it provides for some separation from local government while being able to attract involvement and broader funding support from those local businesses and institutions that benefit from economic development and growth.”

While the EDC has the involvement of the business community through its board of directors, it is “perceived as too county-oriented, not proactive and lacking strong direction,” the Urbanomics report said.

“Perhaps the larger issue ... is there are many well-intentioned critics and organizations with their own economic development agendas and priorities,” the report said. “For this reason, a structural change may be inevitable and necessary.”

The report stated that economic development organizations fall into one of three types, the county’s being a “hybrid type” — a department of county government with members of the private sector on its board of directors.

Another model is to have Chambers of Commerce with economic development responsibilities, with councils or committees that “support and guide the economic development staff and programs,” the report said.

The third type is “public-private partnership organizations, often called Economic Development Corporations or Partnerships,” according to the report.

The economic development strategic plan cites the Anne Arundel County (Md.) Economic Development Corporation, which was privatized as a nonprofit corporation in the 1990s, but still receives most of its funding from the county.

During his Jan. 26 presentation at The Maryland Theatre, Urbanomics President Kenneth Creveling also cited the Franklin County (Pa.) Area Development Corp. as a similar model of privatization, although the FCADC relies primarily on income it generates rather than on government subsidies.


The county commissioners’ view

“Right now, I think it should remain a county department,” Commissioner John F. Barr said. “I’d be open to looking at a public-private partnership, but I would not want to completely privatize it.”

If the EDC were completely privatized, the county would lose input on economic development issues, Barr said.

Commissioner Jeffrey A. Cline wrote in an email that the county has spent considerable effort in revamping the EDC and he does not support privatization of the commission.

The revamping includes the recent establishment of the county Department of Public Relations and Community Affairs, and the hiring of a project liaison “to directly support the retention and recruitment of business,” Cline said.

“Our business development specialist and business support specialist continue to generate new prospects working with the cooperation of the EDC Commission members,” Cline said.

The commission will continue to work with “allied organizations” that “will best serve the community by focusing their assets, by assisting the EDC as advisors and working in coordination as a team,” Cline said.

“At this point, I am in favor of retaining and developing the current EDC,” Commissioner William B. McKinley wrote in an email.

Commission President Terry L. Baker said he also favored retaining the current EDC.

“We cannot stay with the status quo unless if makes absolute good sense,” Commissioner Ruth Anne Callaham wrote in an email. “It is imperative the county investigate however many options there might be in designing an organization to accomplish the goal of working with business to ensure steady growth of jobs.”

Callaham suggested the county identify the best economic development practices from around the region and then come up with a request for proposals for which the commission and other entities could submit bids.


The restructured EDC

The county has restructured the EDC staff into a seven-member “economic development team” that includes people working in other departments and will report to County Administrator Gregory B. Murray. The team would expand to eight members if the county hires a strategic plan coordinator.

The EDC staff now includes a business development specialist, an agriculture business development specialist and business support specialist, as well an office coordinator position. The position of strategic plan coordinator has yet to come before the county commissioners for approval.

Also included in the economic development team is a small-business development specialist who works for the state. A marketing specialist and a project coordinator working with the newly created Department of Public Affairs and Community Relations also would have economic development duties.

EDC Vice Chairman Ron Bowers agreed the EDC should remain an entity of county government.

“I would argue, vociferously, for the Economic Development Commission staying as it has been identified in the ordinance,” Bowers said. “I don’t believe county government needs to give its economic development role away.”

“They can be pulled together under the leadership of the EDC,” Bowers said when asked if that agency should take the lead in coordinating economic development efforts and strategies with other development organizations.

Bowers said he believes a public-private partnership is not necessary, and noted the EDC’s board of directors’ membership comes from businesses and organizations representing the private sector.

Those private sector representatives give the EDC the guidance it needs to support economic development, Bowers said. How active the board is helps determine how effective the EDC is, he said.

The creation of the Department of Public Affairs and Community Relations can work “hand-in-glove and in total concert” with the economic development commission, Bowers said.


What others say

James F. Kercheval, executive director of the Greater Hagerstown Committee, said he read the EDC report more as a call for consolidation of city and county economic development entities, and increased role identification for those groups.

“Sometimes it works, sometimes it’s not as much of a benefit as people think,” Kercheval said of such a consolidation of city and county efforts under one umbrella organization.

Kercheval said he’s researched different setups of economic development agencies, and he’s found that some communities find success in consolidation while others find it works better to simply define the roles of existing organizations with a common goal.

“You all work off the same game plan — where you fit in and where you don’t, and where you can help and where you can’t,” he said. “You just kind of work as a team, even though you keep your department separate.”

The study suggests that the EDC “Negotiate an inter-local agreement with the City of Hagerstown that combines county and city economic development efforts for greater focus, efficiency and joint investment. The EDC can be responsible as the lead economic development marketing organization for the county and city, combining staff as appropriate and benefiting from offsetting budget contributions from the city.”

City Councilman Kristin B. Aleshire, a nonvoting, ex-officio representative of the city of Hagerstown to the EDC, said it is difficult to fully grasp what consolidating city and county efforts would mean “without knowing how the EDC is going to ultimately function and what its priorities are going to be.”

“What am I consolidating the city into? Is it a private entity now? Because that’s one of the initiatives, but we don’t know what those five initiatives are,” Aleshire said.

Aleshire noted the list of priorities submitted by the Greater Hagerstown Committee included wanting to know “when’s the executive director coming back and are you going to be a public or private entity?” while the Hagerstown-Washington County Chamber of Commerce’s major priorities included developing the strategic marking plan.

“You’ve got the chamber saying you need to focus on the airport, and you’ve got Greater Hagerstown saying you need to focus on downtown,” Aleshire said. “Before I could ever consider any type of consolidation, somebody’s going to have to show me where this plan is on the same page among all of the parties or stakeholders.”

Councilman Donald F. Munson, also a nonvoting, ex-officio representative of the city of Hagerstown to the EDC, said he believes the EDC is “headed in the right direction.”

“Implementing a strategic plan is extraordinarily important, and it’s important that it be done in the right way, and it’s important that it include the municipalities, including ... Hagerstown,” Munson said. “And I think the EDC, at this point, is sensitive about that. And I don’t know what the form of the EDC is going to be in the future, but I do believe that Hagerstown will play a strong role in the future.”

Kercheval, who said he did not agree with the negative overall tone of the report that “things were completely disjointed” in the county, suggested creating an organizational chart to provide a better understanding of the roles each entity plays in moving economic development forward and to synchronize a more community-driven effort.

“If we all kind of define where we can help, where our talents lie ... how each of us fits into the bigger puzzle, I think everybody benefits,” Kercheval said. “The (EDC) for the county is always going to be the lead, whether that’s the county or the city when it comes to bringing clients to town, that’s what they do. That’s their mission. ... If there’s certain things that we can help and fill in along the way, we’re happy to offer our assistance.”

“The board of commissioners told the EDC to come back with five actionable and affordable things from the strategic plan” that would be the priority projects, said Brien J. Poffenberger, president of the Hagerstown-Washington County Chamber of Commerce. “The chamber is recommending that structure be one of the five things the EDC looks at.”

The chamber is not recommending one option over another, Poffenberger said.

The chamber submitted a list to the EDC of its top five priorities, the first being to “determine and fully build out the optimal organizational structure for economic development.”

“By prompting questions about organizational structure, the Strategic Plan sounded a bell that cannot be un-rung,” the chamber email said. “The first task, then, should be to determine structure, funding, responsibilities ... chain of command, and metrics by which to measure success.”

“This should be the first priority to get this question resolved,” read the Greater Hagerstown Committee’s response to a request for priorities. “We believe the current lack of staffing, particularly an executive director for the organization, is negatively affecting our economic development efforts and our county’s presence at economic development events in the State.”

“We’re still open to discussing with them in reference to whether they want to go with a public-private partnership,” CHIEF President Gregory I. Snook said Thursday.

Once a strategic plan coordinator is on board, that person might come up with further recommendations for restructuring the EDC, he said.

“I would think that somewhere along the line, you’re going to have to have one person running the show as far as economic development,” Snook said. That could be in the form of an internal department head, or someone heading a public-private partnership, he said.

CHIEF has been around since the early 1960s and has developed five business parks in the county during that time, Snook said. CHIEF, which does not receive government funding, has worked in partnership with the county and city on a number of development projects, he said.

Before the EDC’s executive director was dismissed last year, it had a strategic plan that it followed each year, Snook said in an earlier telephone interview.

Staff writer Holly Shok contributed to this story.

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