Yuma’s Friendly Policies are Attracting Companies

header-industrial-manufacturingBy Mara Knaub, @YSMaraKnaub Sep 30, 2017

Yuma is gaining a reputation for being business-friendly. At least three major companies have moved or announced plans to move to the city, thanks to the city’s “nurturing environment,” according to Julie Engel, president, and CEO of the Greater Yuma Economic Development Corp.

The agency, which is tasked with locating and attracting industry to this region, worked with these three companies — Almark Foods, Martech Medical Devices, and MPW Industrial Services — in tandem with the city.

In a letter to Mayor Doug Nicholls and the City Council, Engel pointed out the reasons she believes the companies chose Yuma. “For a company to choose a community, they have to believe they are welcome and will be treated fairly. GYEDC has witnessed firsthand this is common practice for the City of Yuma leadership. I truly believe the experience these companies have had with the city during negotiations played a critical role in their decision to locate and subsequently expand in Yuma.”

Reducing fees, deferring payments

She also credited the council’s efforts to lower the cost of capital investment with reductions in capacity fees and impact fees. The result is that “companies are recognizing Yuma as a business partner in lieu of a regulatory agency with oversight.”

Specifically, the city reduced development fees 40 to 60 percent in all categories to make it less costly for a new business to locate here and less costly for new construction. The city also reduced the water and sewer capacity fees for new hookups and businesses.

“Our water and sewer costs are now highly competitive if not lower than most of our rival areas for new manufacturing,” City Administrator Greg Wilkinson said.

The city also implemented a “one-stop shop” predevelopment meeting, where representatives from all areas of the city sit at the table in one meeting with a person or business thinking about building in the city.

“This allows most questions to be answered immediately since the staff is present to make suggestions that save them time and money and provides staff with a heads-up so our plan reviews take place much faster than other places,” Wilkinson explained.

The city has also invested in an economic development administrator who works hand-in-hand with GYEDC and is also a facilitator for new businesses and local business expansion. Jeff Burt, the city’s new economic development administrator, also works with new retail companies that GYEDC does not handle.

Recently the city took the predevelopment meeting process to another level. “Our frontline PDMs proved to help businesses and developers, but many times a new manufacturing company or other business brings in unique discharges to sewer or to our air, or they may have special issues to address,” Wilkinson explained.

For these situations, the city put in place the Executive PDM, which is basically the city administrator and respective department directors sitting at the table at the first meeting with a new company.

“This group can make more complicated decisions on the spot rather than telling a new company ‘we will have to get back to you,’” Wilkinson said. “When you establish this great working relationship from the beginning, companies understand that they have found an organization that listens to them, that respects their unique situation and who will be there to help if they get to a critical spot.”

He pointed out that many times a community can lose a company because the initial startup costs are too large. To help with this, the city instituted a policy of allowing companies to pay capacity and development fees over a period of several years rather than up-front. For companies that use a lot of water, these costs can be significant.

“This still maintains the idea that ‘growth pays for growth,’ which keeps it off the back of existing taxpayers, but allows them to come in without the larger startup costs to pay it over time when their facility is making money,” Wilkinson said.

The city also implemented a similar process for residential developers where it defers payment of capacity fees until a house is sold or it closes escrow. A developer does not have to come up with cash upfront when building a home and can pay it when the developer has cash flow from the sale of the home.

Offering incentives, developing workforce

To compete head-to-head with other cities in attracting manufacturing companies, Yuma also offers incentives. The city initiated an incentive policy that allows manufacturers to recapture some of the investment dollars they put into the community in the way of new jobs and new buildings. Rebates are provided, which again lower a company’s investment costs to set up business in Yuma.

However, Wilkinson said, the city only provides incentives for manufacturing companies as it would be unfair to provide incentives to retail companies which compete against other retail companies that are already in Yuma.

Another component in Yuma’s approach is the partnerships it has in the job-training area. “Being business-friendly is not just confined to city staff. It is a community-wide commitment. We are routinely able to demonstrate to a new company that the community can provide the workforce that they need,” Wilkinson said, noting that YPIC and Goodwill have done an “excellent job in the community to help us with workforce training.”

Having community education partners such as Arizona Western College, University of Arizona, Northern Arizona University and Arizona State University has also assisted in the business-friendly atmosphere. “All are very open to working with companies to modify curriculum to what is required for their graduates to qualify for employment,” Wikinson said.

Yuma-area voters helped with the approval of the joint technological educational district which assisted in the recent attraction of Almark Foods. The Yuma JTED, called the Southwest Technical Education District of Yuma, is the only one in the state with a food manufacturing program.

“We were able to show them how we could provide a trained workforce for food manufacturing via the JTED. The JTED is set to work with Almark in the actual development of curriculum so graduates can be prepared to walk straight into their manufacturing workforce. This may also be a key factor in attracting another food manufacturing company to Yuma,” Wilkinson said.

Strong leadership

In addition, Mayor Doug Nicholls launched a regional initiative to attract businesses in partnership with Mexico, called 4FrontED. Regional partners GYEDC, Yuma County, Wellton, Somerton and San Luis work together to establish a strong working relationship with Mexican companies and agencies like PIMSA and Copresan (similar to GYEDC) which has enabled Yuma to attract companies like MarTec.

A business-friendly environment also entails solid, stable leadership, Engel said, recognized the “outstanding” leadership efforts of Wilkinson, Utilities Director Jay Simonton and Community Development Director Laurie Lineberry.

Wilkinson said the city has worked hard “to provide that solid, stable, visionary and tech-savvy leadership” within city staff and departments.

The mayor and council have focused on job creation and economic development, Wilkinson said. “It is incredibly important that the city has a solid mayor and council like it does who are actively engaged and have set up a stable and inviting environment for businesses to want to come to Yuma.”

He added, “We have found that the extra personal touch in having the mayor and city administrator sit in on initial meetings with a new prospective company goes a long way in demonstrating and showing them that our community is the place to locate.”

Being business friendly grows the economy and creates jobs and ultimately leads to a better quality of life. “We live in an amazingly friendly and patriotic community. Yumans deserve nice things, facilities and places for our kids to play, and a great quality of life,” Wilkinson said.

“If we can create more jobs and better-paying jobs, we can lift some of our residents away from being unemployed or underemployed. We have a great quality of life here, and we need to work hard to maintain and grow that.”

Still more to do

Although Yuma has made great strides in attracting business, Wilkinson said there’s more than the city can do. The city lost a couple of manufacturing companies because they didn’t feel it could provide the high-tech workforce they needed.

“Every company that looks at Yuma talks about our business-friendly approach, their assessment of the great dedicated workforce we have here, but the lack of a full four-year university presence to provide a highly educated workforce was an issue for a few,” he said. “Hence the University of Yuma concept that we are working on.”

The idea is that the local college, three universities and the Arizona Commerce Authority will work together to expand their presence onto a full campus to offer more degrees. It would be funded by private sector dollars.

While Yuma has the reputation as being one of the top business-friendly cities in the state, “it is not something you can sit on,” Wilkinson said. “You have to continually work on it all the time.”

To attract more businesses, Engel believes communities should invest in water and sewer infrastructure and road improvements.

“When the company is required to pay for these two fundamental services, we lose the opportunity. Companies are making massive investments in the community by building or buying buildings and equipment that is usually worth millions of dollars,” she said.

“Now add the employee wages and most companies typically lose money for the first 12 to 18 months depending on how quickly they are ready for production. If the municipality is requiring the company to build the roads and extend water and sewer lines for miles as part of their upfront capital costs, the community is quickly eliminated as a viable option.”

Building out the infrastructure should be a top priority, she said. “The cities and towns in Arizona who have adopted this philosophy continue to outperform all other communities.”