Des Moines Register
03-26-07
'Destiny' amenities brighten DM's 'hard sell,' businesses say
Attractions financed by one-cent sales tax initiative would lure employers,
workers, they contend
BY DONNELLE ELLER AND DAVID ELBERT
REGISTER BUSINESS WRITERS
Omaha has the World College Series, Omaha Zoo, Old Market and a cool indie
music scene.
Minneapolis? The Lake District, Mall of America, Twins and Vikings.
Now consider what sets Des Moines apart from other cities in the Midwest and
the rest of the nation. Trails, parks, riverwalk?
Maybe, but not today, say leaders.
Des Moines needs to step up its game and invest in so-called signature
amenities that give fast-growing companies - and the workers they need reasons to make the capital city home, say business leaders.
But others question whether the investment would push Des Moines ahead of the
pack, lacking natural strengths that other cities have - warm weather, beaches
and mountains.
"There are powerful and probably irreversible preferences as to where the bulk of
creative industries and creative workers are locating," said David Swenson, an
Iowa State University economics researcher.
Des Moines-area leaders have called for a 1-cent sales tax increase that would
generate an estimated $853.2 million over 10 years to help pay for those projects
as well as cut property taxes for homeowners and businesses. Without the tax,
business leaders say Des Moines will fall behind competitor cities in the race for
ever-scarcer workers and high-paying jobs.
"It's a challenge to get candidates to even visit Des Moines," said Mark Oman,
senior executive vice president at Wells Fargo & Co. And it's an especially "hard
sell to young people."
Consultants who help businesses decide where to expand or locate agree that
lifestyle opportunities have become more important in the high-stakes economic
competition.
"There's only one winner," said Robert Ady, a Chicago business consultant.
"There's only gold. Second place is zero."
Workers, businesses look for quality of life
Most agree that where a business - and its work force - calls home is important.
In a new survey, nearly 700 Iowa workers and executives ranked a business'
location higher than other workplace issues such as corporate ethics, teamwork,
and treatment and reward of employees.
That belief changed only slightly among generations: Baby boomers ranked
community first, while Generation X placed it second after ethics, and Generation
Y, after teamwork, according to a survey by David P. Lind & Associates. The
Clive consultant sponsored the study to better direct clients about worker
preferences on benefits.
Two Chicago-based site consultants, Darin Buelow, a senior manager at Deloitte
Consulting, and Ady, president of Ady International, say a community's quality of
life is key as businesses look to expand or relocate.
"I would think if Des Moines wants to mature from lower-cost, back-office service
- which is why a lot of those companies located in Des Moines - you've got to
start investing in quality of life," Buelow said.
But vibrant arts and entertainment, recreation, crime and housing affordability
only come into play after a city clears a dozen, mostly financial, hurdles.
Only the two or three finalist cities compete on quality of life, Ady said. Most other
locations never know they were in the running, eliminated early because they
failed to clear economic hurdles - cost of facilities, taxes, energy and
transportation - or labor concerns - worker education, earnings, technical skills
and supply.
"No one will go to a Web site first to see what a city's museums are like," Ady
said.
Quality of life can gain importance, said Ady and Buelow, depending on whether
a company pulls its work force from the existing labor pool or attracts workers
from outside it. And community pushes to the top three considerations - along
with image and air transportation - when it comes to the location of corporate or
division headquarters, Buelow said.
"If you are looking to attract and retain young professionals and you are
competing with San Diego and Denver and places that have a lot of interesting
outdoor activities, you've got to improve quality of life," Buelow said.
How two companies have fared in Iowa
Mike Palmer, a spokesman for Allied/Nationwide, said the Ohio-based insurer
looked at several locations before deciding to invest $142 million in its downtown
Des Moines operation. Denver; Sacramento, Calif.; and Gainesville, Fla., all have
large operations.
One reason for the decision to expand in central Iowa was the Des Moines
division's success, Palmer said.
With its expansion decision, Allied now faces creating 1,570 new jobs. Workers
will come from inside and outside the community.
Allied has "been able to get the right kind of quality work force" in Iowa, he said.
"Once candidates visit, they find all the things we have to offer and are
surprised," he said. "The cost of living is appealing, the commute only takes 10 to
15 minutes, good schools. ... It's a community that is attractive."
In Ankeny, Accumold Chief Executive Roger Hargens gets calls about every
month from development leaders in other states that want the high-tech plastics
manufacturing company to consider moving.
One reason Accumold has remained in Ankeny is the skilled work force it has
built over 22 years of operation. Still, the fast-growing business plans to nearly
double its work force to about 200 over the next five years and is concerned
about having workers with the technical skills it needs.
Des Moines is projected to be short about 60,000 workers over the next five
years, the result of baby boomers retiring combined with marginal population
growth.
Hargens wonders if Des Moines-area businesses and workers would be better
served by using the money earmarked for culture and recreation on expanded
training opportunities for new and existing employees. That helps the worker and
the company, he said.
"The best quality of life is a quality job," said Hargens, whose company last year
decided to pay to train up to four students annually at Des Moines Area
Community College, then guarantee them a job after graduation.
Hargens likes the sales tax initiative's ability to reduce corporate taxes. He's
unsure, though, whether the tax reduction will be real. "I've seen promises of tax
relief disappear," he said.
Competition is fierce, executives say
Martha Willits, chief executive of the Greater Des Moines Partnership, the area's
lead economic development group, said tax relief is crucial to lower costs for
residents and businesses.
But the community also needs to continue working to make central Iowa a better
place to live.
Already, the Des Moines area has strong schools, low crime and amenities like
the growing Principal Riverwalk, Meredith Trail, Iowa Events Center and Science
Center of Iowa.
"We can't sit back and say we're done, we don't have to invest in arts, culture
and recreation," said Art Slusark, spokesman for Meredith Corp. "Minneapolis,
Kansas City and Omaha aren't saying they're done.
"Competition out there is fierce," said Slusark, who has led the Partnership's
business recruitment team.
Des Moines and Iowa have the traditional economic development tools in place,
said Slusark and Willits. The piece that's missing is signature arts, culture and
recreational opportunities, the kinds of elements that set a city apart from others.
"Everything we know, see and hear tells us that quality of life is how we can best
compete," said Willits.
While workers want "oceans and mountains," she said, national research shows
that "the No. 1 element that 20- and 30-year-olds look for is trails. ... We can
build trails."
It's a message that rings true to Charlie Wittmack and a group of die-hard cyclists
who pedal their way to downtown offices most days. The trail system they use is
far from complete.
"It would be an incredible thing in Des Moines if you didn't have to drive a car to a
trail head to ride a bike," said the 29-year-old attorney.
Easy access to trails, museums and symphony are among the reasons Wittmack
and his wife, Katie, chose to live in his hometown of Des Moines over
Washington, D.C., where they went to school, and Charlotte, N.C., her
hometown.
He believes the sales tax proposal can bring more music, art and recreation into
the lives of residents. "Des Moines could go from great to exceptional. ... We
deserve that."
Reporter Donnelle Eller can be reached at (515) 284-8457 or deller@dmreg.com