Last updated on 2012.11.20
Matt Groce astutely points out that Madison's successful effort to get Global Polymer Industries to move from Arlington to Madison is less an instance of Madison beating Arlington than of Madison beating Brookings. Steve Sanchez then points to the enlightening coverage in the Brookings Register. In three articles over the past week, Ken Curley explains why Global Polymer was getting the heck out of Dodge.
Global Polymer had purchased an acre adjoining its Arlington factory, cleared an old house, and laid electrical conduit in anticipation of expanding the factory. But when the company asked the city to rezone that land from residential to commercial, neighbors balked, and the city said no.
[Co-owner Dan Palli] said the opponents — owners of adjoining property — feared that the commercial operation might devalue their land, and they were worried about noise and runoff from the building.
"They compared us to a hog confinement building," Palli said. "They'd never been in our building, never talked to us. They hardly knew anything about us."
He said there are no runoff issues — no water used in manufacturing ever enters the storm sewer system — and the building expansion itself would have been screened by a stand of evergreen trees.
"You would hardly even know we were there" [Ken Curley, "Manufacturer Considers Pulling up Stakes," Brookings Register, August 24, 2012].
The city defended the rejection, saying that it was listening to the concerns of landowners and that it's not the city's place to advocate for any specific business or group. But Rejecting Global Polymer's rezoning application riled the company many supporters around town. Former Arlington economic honcho Coleen Liebsch has threatened to recall Mayor Amiel Redfish.
The mayor himself has made clear that he doesn't think Arlington can support big business:
The mayor is philosophical about Global's possible departure:
"I certainly would like to have them stay in town, but at this point, I don't know. They need to expand. They're a very successful business, getting bigger and bigger. Just like Daktronics and Twin City Fan had to expand out of town to get workers, that's the kind of situation they're in. Business is business" [Ken Curley, "Business Leader Asks for Recall of City's Mayor," Brookings Register, August 24, 2012].
I admire any mayor who can recognize his community's limitations, even in the face of big-dollar pressure. But I can also understand a manufacturer taking the mayor's philosophy as a clear sign that to get big, they've got to get out.
The question then is where do we get out to?
As Sanchez noted yesterday, one of the big factors besides the blocked expansion is electricity costs:
"Global's rate is .0547 per kilowatt hour (kwh), with a higher demand charge as well, compared to Howard at .032 and Brookings at .033. The city has also been threatening a 17.5 percent increase in electric rates this year" [Global Polymer co-owner Todd Huntimer, quoted by Ken Curley, "Arlington Working to Keep Global," Brookings Register, August 28, 2012].
Huntimer said the difference in those electric rates could mean annual savings of up to a quarter-million dollars. That should cover a lot of moving costs.
Madison's heavy commercial electric rate is $0.04248 per kilowatt hour. Given Huntimer's estimate, Global Polymer's savings on comparable power usage in Madison will be around $135,000 a year, $100,000 less than they would have been in Brookings. So electric rates may not have been the deciding factor... or if they were, then the city and Heartland (featured prominently in the celebratory press release) must have worked out a deal to give Global Polymer a discount on their electricity. If that's the case, the big question will be whether the city will also offer Global Polymer workers a discount on their residential electric rates if they move here and build new houses.
Perhaps Madison's victory came because Brookings wasn't trying very hard:
In Brookings, Al Heuton, executive director of the Brookings Economic Development Council (BEDC), confirmed that his organization has had discussions with Global Polymer "within the past month-and-a-half to two months."
But Heuton doesn't necessarily want to see the manufacturer move its operation.
"We work with Arlington — Volga, too. Both are members of BEDC," Heuton said. "We work with them directly on industry retention and recruitment."
Nevertheless, he said, "we have had talks with Global. But our motivation is not to try and take the company away from Arlington. We offered to do whatever we could to help solve the problems there" [Curley, 2012.08.24].
I mentioned yesterday that helping Global Polymer bail probably disinclines Arlington leaders to cooperate much with Madison's leaders on economic development projects. I hope that's not the case, but one could understand hard feelings in this situation. Mr. Heuton seems to acknowledge that possibility as well; as a partner with Arlington in the BEDC, Brookings has an interest in helping its neighbors and keeping them on board for collaboration in future projects.
So maybe even if Madison didn't offer any big handout, Madison just worked harder to make the sale... while Brookings realized it didn't need to stick this feather in its cap at the expense of a community with which it partners on other projects.