Will Sisters have an Economic Development Director?

(This article originally appeared in the Nugget Newspaper 7/20/2010)

By Bill Mintiens The Sisters City Council budgeted and approved $30,000 for the 2010/2011 fiscal year for a part-time economic development director. The 2010/2011 fiscal year started on July 1. The money is there, the director is not. Back on May 6, Patty Vandiver, chamber of commerce president and SBART (Sisters Business Attraction and Retention Team) project manager, wrote a letter to the Sisters City Council stating, "The Sisters Country Chamber of Commerce would like to request the consideration of $30,000 to be budgeted into the 2010/2011 fiscal year for a part-time, paid position for an economic development director." Having just entered into their yearly budget cycle, the council dutifully discussed the proposal during budget committee meetings and decided to add the part-time position into the city's 2010/2011 budget. But councilors and budget committee members had reservations. Vandiver's proposal stated that the economic director should be "under direction of the Sisters Country Chamber of Commerce Executive Board of Directors." Councilor Sharlene Weed was a vocal opponent. "I'm not in favor of budgeting $30,000 for this position; it seems like an extravagance during these economic times," she said. "And besides, I have a lot of questions about the position, there are too many unknowns for me. And I'm not in favor of the person reporting to a committee." Chris Tosello, a budget committee member, agreed with Weed. "I think there are too many gray areas about the position right now; we need clarification," said Tosello. Council President Bill Merrill saw the proposal differently. "I would not object to leaving the $30,000 in the budget. But I want to be sure we go through a selection process utilizing people like Jason Carr (Prineville's economic development director) and Lee Smith (La Pine's industrial group manager) who are familiar with the process and needs of the position. And I'd like to see the Sisters chamber add some matching funds for the position. There are a lot of questions that need to be answered between the chamber and the city council," said Merrill. The council, clearly wanting clarification on the duties, responsibilities, and reporting structure of the position turned to Roger Lee of EDCO (Economic Development for Central Oregon) for assistance. EDCO helps to fund and manage economic development director positions in Redmond, Prineville, and Madras. Successful programs in both Prineville (acquisition of the Facebook facility) and Redmond (Altrec, T-Mobile, and several other businesses) give EDCO experience and credibility with hiring and management. When asked about EDCO's role in Sisters' hiring process, Roger Lee, in an e-mail dated June 25, wrote, "We are still trying to work out some of the logistical and legal details. Our board has officially not yet decided to proceed, however I don't see any real roadblocks. I expect that we will have a decision at our July 8 board meeting. Assuming that EDCO is involved as discussed, we would look to advertise, conduct interviews and ideally hire by the first week of August. I would expect that EDCO would coordinate the interviews, but that most of the hiring panel would be comprised of leaders in Sisters." EDCO's July 8 annual meeting, held at St. Charles Medical Center in Bend, went longer than expected, allowing the EDCO board no time for discussion. Roger Lee briefly mentioned the Sisters issue but tabled the discussion. Eileen Stein, Sisters city manager, thinks she understands what Lee means by "legal details." In an e-mail dated July 13, Stein wrote, "Last week Mayor Kellstrom asked me to give our legal counsel an agreement to review. It was an agreement between the city and EDCO relative to the position. So this is what the 'legal' issues probably are." Three weeks into the 2010/2011 fiscal year, there is no sign that Sisters is close to hiring an economic development director. Councilor Sharlene Weed, still opposed to the position and frustrated by the process, recently commented: "We have not had a proposal. What is the plan? Job description? Reporting structure? Measurable outcomes? I would rather use the funds to reenergize our Community Action Team... pay for a part-time director. That person could help 'stimulate' a number of community projects (leadership, outside voice, public art, etc.) as well as 'economic development.'"

Attracting and Keeping Business is a Tough Job

This article was published in the 5/10/10 issue of the Nugget Newspaper http://www.nuggetnews.com/main.asp?SectionID=7&SubSectionID=88&ArticleID=17176&TM=37147.77

Bringing new businesses to Sisters - and keeping the ones that are here - is proving to be a challenge for the citizen volunteers who have taken on that mission.

The Sisters Business Attraction and Retention Team (SBART) has been working on attracting and retaining businesses for about 16 months.

Team members include Mac Hay (Chair), Jerry Bogart (Vice Chair), Patty Vandiver (Project Manager), David Winter, Bill Willitts, Erin Borla, Lisa Clausen and John Tehan - all Sisters residents.

"SBART is the 'rapid response team' that was envisioned years ago. They take a huge burden off city staff because they can meet the needs of new business inquiries in a timely way," said Sisters City Manager Eileen Stein.

A sub-committee of the Sisters Area Chamber of Commerce, the all-volunteer team is a cross-section of the Sisters business, arts, and cultural community.

"Because of the need for confidentiality with potential businesses, we could not be under the city's umbrella, it just made sense to be under the chamber's umbrella," said Vandiver.

SBART receives no funding from the chamber but is working with the Sisters City Council on future funding for marketing programs.

"Right now we don't have our own Web site or marketing materials but, for relocation inquiry purposes, SBART contact information is on the chamber's web site. We need somewhere between $30-50,000 in funding to pay for a marketer to create and execute a marketing plan aimed at potential businesses," said Vandiver.

SBART's outreach and "attraction" efforts have been significant, even without adequate marketing funds.

"We've made contact with more than 40 companies over the past 16 months who are very interested in relocating to Sisters, but the lack of financing is what's holding them up," said Mac Hay.

Hay added "We're talking with one company that could potentially employ over 100 people here in Sisters. They'd like to build a building, but need investors to make it happen."

Much tighter lending guidelines at banks and lending institutions, combined with reluctance by local investors, have left many potential new start-ups without the capital to get their businesses started.

Deanna Allred, a business development officer with the Bank of the Cascades, sees this every day.

"Credit is still pretty tight for start-ups in Central Oregon. Banks are still lending of course, but good credit quality is very important, as is a very well-thought-out business plan," said Allred.

Adding to the tight credit environment, potential Sisters Country owners/investors have shied away from local investment opportunities. Two recent examples include Crown Point Bank, a start-up which heavily solicited local investment, but ultimately dissolved; and Pinnacle Alliance LLC's attempts to fund a senior assisted-living facility in the newly annexed Metolius Meadows Village property. (See related story, page 1.)

"My goal was and is to finance the development through local investment and ownership. Unfortunately, given the economy, I don't think local ownership will happen, investment is likely to come from out-of-the-area sources," said Mark Adolf, president of Pinnacle.

SBART admits that their efforts over the past 16 months have been more toward "attracting new businesses" than retaining existing ones.

"We have about five potential new businesses that could potentially employ about 30-50 people here in Sisters within the next year, depending on how the economy recovers, of course," said Patty Vandiver.

However, these new companies may not make up for the continued loss of companies and jobs from Sisters.

After 15 years in Sisters, Faceout Studio, formerly DesignWorks, moved their office and nine employees this past January from their South Pine Street building to a space in Bend's Old Mill District.

A graphic design studio specializing in publishing, Faceout's clientele is national and the location of the company could be anywhere. Torrey Sharp, co-owner of Faceout, has lived in Sisters for close to 20 years but says the move was right for the company.

"Here's the brutal reality," said Sharp. "Artists and creative people need a variety of cultural influences to stay 'cutting edge' in commercial design. Our nine employees, for the most part, come from larger metropolitan areas. Sisters' 1800s theme really isn't enough to stimulate them. We realized that, after 15 years in Sisters, the environment was stifling the creativity of our employees, most of who commuted from Bend anyway."

Sharp also emphasized that commercial rents in Bend also made the move attractive to his company.

"The Old Mill District offered us a commercial rent that was very close to what we were paying in Sisters - and they really wanted us to relocate there. But we didn't receive any 'incentives' to move to the Old Mill," said Sharp.

A more recent example of a company leaving Sisters is O'Keefe's Company, manufacturer of O'Keefe's Working Hands Créme. The company employed 20 people in full- and part-time positions. Sold to Gorilla Glue of Cincinnati, Ohio, the company's jobs are moving to Ohio. (See related story, page 1.)

SBART volunteers acknowledge the task of retaining businesses is very difficult because they don't always "get wind" of a potential loss until after the fact.

"We're frustrated when we hear through the grapevine that a company is leaving Sisters. We'd like the opportunity to chat with them before they leave town," said Mac Hay.

Stein empathizes with SBART's challenge.

"I think SBART has been concentrating on 'attraction' but, clearly, they realize they also need to concentrate on the 'retention' part of their mission, too," said Stein.

Stein added "Economic development takes a long time. You have to kiss a lot of frogs."

Although the SBART team works well together, it's clear they would appreciate help from all the residents of Sisters Country.

"Everyone in Sisters needs to be the eyes and ears of SBART," said Patty Vandiver. "We all encounter people who come into town and say 'wouldn't it be great to have our business here and live here as well.' We encourage everyone to make note of these contacts and pass this information on to one of us so we can follow up."

Contact information for SBART can be found on the Sisters Country Web site, http://www.sisterscountry.com