By John Stang for TCAJOB
For years, Sen. Maralyn Chase, D-Shoreline, has tried to get legislation passed to help established mid-sized businesses grow. She believes growing existing mid-sized businesses is a better way to create jobs than providing tax exemptions to lure new businesses — something she views as a hit-and-miss gamble when it comes to permanent in-state jobs.
[blockquote quote="We are very excited to see such enthusiasm and strong support for Economic Gardening in Washington following the launch of our Tri-Cities pilot program." source="Lori Mattson, president and CEO of the Tri-City Regional Chamber of Commerce" align="right" max_width="300px"]
But no luck. That idea just didn’t compute with other legislators.
Then last summer, Chase received a phone call from Sen. Sharon Brown, R-Kennewick. Brown was at a national economic development conference where participants were talking about growing mid-sized businesses and that concept clicked in Brown’s mind. “That’s what you’ve been talking about,” Brown said to Chase.
Meanwhile, the Tri-City Regional Chamber of Commerce had already started an experiment with this concept — dubbed “economic gardening” — in January 2015.
Today, that experiment is in its final stages, and five Tri-Cities’ companies have optimistic-looking outcomes. It’s the first time the Economic Gardening concept has been used in Washington.
The Tri-Cities’ experiment prompted Chase to duplicate the Mid-Columbia effort on a statewide level through a bill the Legislature overwhelmingly passed in March.
“We can use this model in Grays Harbor or Pacific counties,” Chase said.
So what is this Tri-Cities experiment that will be tackled elsewhere in Washington?
The Tri-Cities Regional Chamber of Commerce picked up the Economic Gardening concept from the Edward Lowe Foundation in Michigan, which funds efforts in 25 states to improve so-called “second-stage companies.” The late Ed Lowe invented kitty litter. Under the foundation’s program, an established mid-sized firm would obtain access to national-level experts via phone, email and Skype to get 36 hours of feedback and advice on how to expand.
Austin Neilson, government and economic affairs director for the Tri-City Regional Chamber, said mid-sized firms that have not reached their full potential get lost on the shuffle of more glamorous economic development efforts. It’s an opinion shared by Chase.
“After they’ve been here so long, they’re often overlooked,” Neilson said.
So the Tri-City Regional Chamber sifted through a couple dozen applicants from a field of companies that met the requirements. They had to have 10 to 99 full-time-equivalent employees, plus $1 million to $50 million in annual revenue. At least three are technology-oriented, and none are among the standard Hanford subcontractors or sub-subcontractors.
Two have completed their work with the consultants — Pay Plus Benefits, which handles human resources software for the health care industry, and Paragon Corporate Housing, which provides housing for people on extended stays in areas beyond what is practical for a hotel. Neilson declined to identify the other three firms, saying those names will be available to the public after each finishes the program.
Pacific Northwest National Laboratory and Gesa Credit Union are footing the bills for the consulting work.
“The local community got together first. … it’s all locally driven,” Chase said.
Neilson said the Chamber has received overwhelmingly positive feedback from the effort. However, he acknowledged the chamber has not set up specific metrics yet to measure long-term results. And he did not expect instant booms in employment among those five companies, saying business expansions take time.
“They cannot flip a switch and make this growth instantly happen,” he said.
When the fifth of the current participants finishes the program, the Chamber hopes to sign up another five companies to continue it.
Meanwhile, the Tri-Cities effort influenced Chase, who with Brown’s help, moved it through the GOP-dominated Senate — to introduce Senate Bill 6100 to establish an “economic gardening pilot program.”
The bill orders the state commerce department to set up a statewide program for companies with six to 99 employees and annual gross revenues between $500,000 and $50 million. The commerce department is supposed to work with local chambers of commerce and economic development organizations to set up the program. That work is supposed to be done by Dec. 1.
Businesses will receive assistance in market research, business modeling, identifying sales leads and mapping out strategies.
Then the commerce department and participating organizations must publish criteria for selecting up to 20 companies to participate in the project. The effort must provide a report to the Legislature by Nov. 1, 2017 on the services provided, jobs created and increases in sales and services by the participating companies. Annual reports would be due by Nov. 1, 2018 and Nov. 1, 2019 to measure the state pilot program’s effectiveness.
The Senate passed the Chase’s bill 44-4 with Brown and Sen. Mike Hewitt, R-Walla Walla, supporting it. The House passed it 67-29 with Reps. Larry Haler, R-Richland, Brad Klippert, R-Kennewick, and Maureen Walsh, R-Walla Walla, supporting it. Rep. Terry Nealey, R-Dayton voted against it.
Gov. Jay Inslee signed the legislation April 1, and Lori Mattson, president and CEO of the Tri-City Regional Chamber of Commerce, was there for the occasion.
“We are very excited to see such enthusiasm and strong support for Economic Gardening in Washington following the launch of our Tri-Cities pilot program,” Mattson said. “We greatly appreciate the leadership of Sens. Maralyn Chase and Sharon Brown to make this program possible. Their efforts, along with the support of Gov. Inslee and the Department of Commerce team, have enabled Economic Gardening to quickly grow from the Tri-Cities to our entire state.”
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