CED Series: Attracting economic growth
In 2011, Charlotte went bananas.
City officials in North Carolina launched a marketing campaign to entice Chiquita Brands International (aka Chiquita Banana) to relocate from Cincinnati and make Charlotte their new headquarters. Amidst photos of bananas framing city signage, a #bananasforCLT hashtag on Twitter, and yellow bow ties, the government offered $22 million in incentives over a period of 10 years to seal the deal.
Economic developers often use incentives and marketing tactics to encourage companies to relocate or expand to their communities, a practice both costly and competitive. A key tenement of economic development, it has recently evolved to include attracting and retaining workers.
Charlotte was successful in their bid, anticipating 400 new jobs and $14 million of investment. Although the resulting jobs numbers weren’t quite as expected (134 local hires, 141 transfers from Cincinnati, and 28 recruitments from outside) city officials cited $11 million in construction, new residents buying homes and paying taxes, and charitable contributions as a worthwhile return on investment.
Last year, Amazon made headlines as cities lined up for the opportunity to host HQ2, the company’s second North American headquarters. The expected antics ensued: Newark and New Jersey offered nearly $7 billion in tax incentives, Birmingham, Ala., constructed giant Amazon boxes around town, Phoenix did something with a cactus that didn’t really work out, and Mayor Sly James of Kansas City purchased 1,000 items from Amazon and used the reviews to promote his town.
Even Anchorage got in on the action, citing easy outdoor access, university graduates, and lack of traffic in an online application. From the 238 proposals submitted, Amazon selected 20 cities for round two and is currently making the rounds to select the location for their expansion. Anchorage didn’t make the cut.
The Ted Stevens Anchorage International Airport is the fifth largest cargo hub in the world. (Photo/Chris Arend Photography/Alaska Division of Economic Development)
Economic developers in Alaska are generally skeptical of our ability to compete head-on with other states to attract Fortune 500 companies. When considering what might work in Alaska, Bill Popp, CEO of the Anchorage Economic Development Corp. says that his team is focusing on opportunities at the Ted Stevens Anchorage International Airport.
“We’re looking at distribution facilities for pharmaceuticals, supply chain logistics, there’s potential in high-end electronics and aviation parts distribution,” he explains. “When you consider that Anchorage has the fifth-largest cargo airport on the planet with hundreds of wide body jets and the opportunity for foreign carriers to exchange cargo here, there are a lot of possibilities. The challenge is getting them past the cost of construction and the cost of labor.”
If labor is expensive and in short supply, what can we do to attract more workers to Alaska? Economic developers have recognized a shift in who attracts whom: Instead of talent following companies, companies have started following talent.
Back in 2005, author Thomas Friedman told us that “It’s a Flat World, After All” and since then, it’s flattened even further. We’re now competing on a global scale. As availability of qualified workforce continues to plague Alaska businesses, attracting talented new workers to our state, along with growing our own, is essential.
People are more mobile than ever before, and can choose where to travel, work, and pursue an education. Attracting potential workers that would appreciate the Alaska lifestyle could help solve the labor shortage.
There’s also the matter of “boomerangs”: young Alaskans who leave the state (often for education) and find themselves wanting to come home after graduation or launching their careers outside.
Born and raised in Anchorage, Chase Christie moved to San Francisco shortly after graduating from the University of Oregon in 2004, and started a career working in solar energy. After 15 years in the Bay area, he was eager to return home but knew he needed to find the right opportunity. When an Anchorage-based solar company offered him a job, he jumped at the chance.
He says the proximity to the outdoors is just as great as he remembers, but that the city has changed a lot, too.
“Anchorage has evolved in so many great ways since I was a kid. There's a more developed art and music scene, there are great restaurants, things that I didn’t appreciate when I was younger that I do now make the city really special and so unique.”
Christie is here to stay.
“I have a friend from New Hampshire who moved here in 1999 and he says it best: ‘I’ll move somewhere else, just show me someplace better.’ And I couldn’t agree more.”
Moira Gallagher manages Live. Work. Play, AEDC’s grassroots effort to make Anchorage the No. 1 city in America in which to live, work, and play by 2025.
She frequently considers how to attract more people to our state, and laughingly says, “I’ve actually thought about putting signs in sweaty subways during the summer — something along the lines of ‘Guess what? In Alaska it’s 68 degrees and sunny in the middle of the summer’ — an appeal of Alaska being it never gets too hot!”
There are opportunities aplenty to continue developing a lively and vibrant downtown core in Anchorage. (Photo/Ken Graham Photography/Alaska Division of Economic Development)
Despite our advantages, she says that there are two challenges to attracting new workers to Anchorage: lack of affordable, high-quality housing and lack of a dynamic urban core.
“When people live downtown they bring vibrancy which is great for existing businesses and attracts new businesses,” she said. “People want entertainment, restaurants, music, public art. The greatest cities in the world have walkable, lively, happening downtowns.”
That said, Anchorage offers an appealing combination of city and wilderness.
“Our outdoor recreation is second to none. We have more acres of parkland than any other city in America,” she said. “You can get on your bike and be in the Chugach foothills 10 minutes later. In the winter, you can ski Kincaid Park on the lighted trail, or go to the downtown tree-lighting ceremony. In the summer, visit your favorite fishing hole at Ship Creek or ride miles of bikes trails. And the people here are great.”
Both Gallagher and Christie have significant others who relocated to Alaska. Gallagher says her husband is from New York and “loves that Anchorage feels like a small town, yet is large enough to support big-city amenities like the performing arts and multiple general hospitals,” while Christie says his Berkeley-born girlfriend “has a job that she absolutely loves, finds she’s inspired by the people she works with, and sees living in Alaska as a long term opportunity.”
Speaking of relationships, are you wondering how things turned out between Charlotte and Chiquita? Chiquita was purchased by a Brazilian company in 2015 and shortly after, packed their bags and departed Charlotte… even after the yellow bow ties, clever hashtags, and $22 million in tax incentives (some of which will be refunded, but still!).
Now that’s bananas.
Gretchen Fauske is marketing-minded economic developer fueled by a passion for entrepreneurship, innovation, and small business. As the associate director for the University of Alaska Center for Economic Development she is responsible for leading the entrepreneurship, marketing, and outreach efforts of CED as well as providing strategic leadership for both CED and the UAA Business Enterprise Institute.