HomeMy WebLinkAbout12.03.2001COUNCIL WORK SESSION
December 3, 2001
4:45 p.m.
Council Chambers
Members present: Mayor Rooff, Anders, Krizek, Murphy, Getty, Berry, Gronen, Jordan.
Moved by Berry, seconded by Anders that the Agenda, as proposed, be approved. Ayes: Five.
Absent: Gronen, Jordan. Motion carried.
Carl Adrian, President of Cedar Valley Economic Development Corporation, reviewed the Cedar
Valley Corporation. The Cedar Valley Economic Development Corporation was created in 1984
with the recognition that companies considering a new or expanded location select an area as
well as an individual site.
Gronen now present at 4:47 p.m.
The process of selecting an area is based on a variety of factors, some objective and others
subjective. Classic location factors include: distance to markets, availability of raw materials,
availability of labors and its cost. One of the reason for creating Cedar Valley Economic
Development was that an economy of scale could be achieved if the governments as well as the
private sector combined financial resources to create a single organization responsible for
marketing the area as a premier business location to new and existing businesses. Mr. Adrian
stated that the city could barely hire an entry-level staff person for the investment it makes in
Cedar Valley Economic Development. The city's investment enables three economic
development professionals with over 40 years of combined experience to represent the
community. The city's investment also contributes to a variety of activities, including national
advertising, sales calls on companies in other major metropolitan areas and participation with the
State of Iowa in its marketing, existing business and workforce development programs.
Jordan now present at 4:50 p.m.
Cedar Valley Economic Development deals with two types of prospects: existing businesses and
new companies. In working with existing business expansions, Cedar Valley encourages and
helps the company to satisfy their requirements in the city in which they are already located.
Advanced Heat Treat, Waterloo Tent & Tarp, GMAC, Waterloo Industries, APAC and Affina
are all projects with Cedar Valley involvement and all fit into this category. Over the years,
Cedar Valley has been involved, and in many cases, played a key role in the new employer
locations and local expansions that have occurred in Waterloo. During the 1980s, Cedar Valley
worked with IBP and Eagle Tannery. In the early 1990s, Principal Financial, Ruppman (now
Affina), APAC, Ron Weber and several suppliers to John Deere, such as Premier Castings and
Cedar Metal Works, were among Cedar Valley's prospects. Most recently, Cedar Valley was the
initial and primary contact for Ryder's location in the Northeast Industrial Park, as well as the
primary contact with both Lockwood Greene and Hunt Wesson. Cedar Valley assisted the
Waterloo Industries project by preparing applications for this project as well as arranged
meetings with city, state and company representatives to finalize IDED participation.
Mr. Adrian stated that some will argue that many of the projects would have happened whether
Cedar Valley existed or not. If Cedar Valley did not exist, then the city would be spending more
on economic development internally or through another outside organization to accomplish what
Cedar Valley is doing. Mr. Adrian stated he does not believe the city can buy the same quality or
professionalism for what it invests in Cedar Valley Economic Development Corporation.
Mr. Adrian stated that the city and governments as a whole in Black Hawk County spend
proportionately less on area -wide economic development activities than their counterparts.
Approximately 20 percent of Cedar Valleys' $385,000 annual operating budget is from public
sources. The average between Iowa's eight MSAs is 32 percent, while the average annual
operating budget among these organizations is over $700,000. Even by eliminating the two
largest area -wide economic development budgets in the state, Cedar Rapids and Des Moines, the
Cedar Valley area is being outspent by our competitors by over 25 percent. At the same time,
Council Work Session
December 3, 2001
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most of the major cities in these MSAs spend as much or more than Waterloo for internal
economic development staff and related activities.
Mr. Adrian reviewed the economic impact on Waterloo with the Target Distribution Center.
Based on information gathered from Target Corporation concerning employment, payroll and
investment, UNI's Institute of Decision Marking completed an economic analysis for the
Distribution Center. This analysis was used to estimate the impact of the new Center on the City
of Waterloo. Money employees will spend in Waterloo each year assuming all local employees
spend 75 percent of their payroll locally is as follows: Year 1 the impact in Waterloo will be
$9,177,811, Year 2 it will be $12,677,785, Year 3 it will be $15,468,222 and Year 4 it will be
$18,561,866. Employment in Waterloo generated as a result of the payroll spent by Target
employees will be 90 in Year 1, 126 in Year 2, 151 in Year 3 and 182 in Year 4.
Mr. Adrian stated that with the national recess, they are seeing a slowdown in economic
development in smaller companies, but there is some activity in the Fortune 100 companies. Mr.
Adrian reported Cedar Valley is focusing on marketing companies in advanced technologies and
bio-tech companies.
Councilperson Krizek asked if Waterloo has been at a disadvantage because the city does not
have high speed communication capability. Mr. Adrian responded if it has been, that has not
been told to them. Mr. Adrian stated larger companies are convinced they can access high speed
data communications and smaller companies don't ask about it.
Mr. Adrian stated that from 1994 to 1990 the city contributed $45,000.00 to Cedar Valley
Economic Development Corporation and in 2000 the city contributed $50,000.00. Cedar Falls
contribution to Cedar Valley Development is $25,000.00 and they also have an incentive, and
Black Hawk County contributes $7,500.00.
Mayor Rooff suggested that the funding be approved and that the Chief Financial Officer decide
the best way to make payment.
Joe Vich, President of the Board of the Cedar Valley Economic Development Corporation, stated
they would like to come back to the council in a few months to talk about what Cedar Valley
sees in the future. Cedar Valley will have a business plan, which will lay out the best way to
spend their dollars.
Moved by Jordan, seconded by Anders that the payment to Cedar Valley Economic Development
Corporation for funding in the amount of $45,000.00 for F.Y. 2002 be placed on the Finance
Committee agenda of December 10, 2001 and that the meeting be adjourned at 5:07 p.m. Ayes:
Seven. Motion carried.
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Nancy Eckert
City Clerk
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