Mark Green: What is the Bowling Green Chamber of Commerce’s current membership and budget?
Ron Bunch: We believe we’re the fourth largest chamber in Kentucky. We have about 1,350 partners – we don’t call them members because we expect them to be partners in our business. And we have a budget of almost $2.5 million annually in the chamber, but we also run seven other entities.
MG: What are the other entities under your umbrella?
RB: We have a couple different development entities: one public development entity and one private, not-for-profit entity. We have an entity that we do bond issues through, we have a PAC (political action committee), we have two education-related foundations, and we run the training consortium. We have a pretty complex structure. I have not seen another one in the state with as many entities and interactions as we have.
MG: Was that a conscious strategy or did it evolve through opportunity?
RB: It sort of evolved. When I got here, there were six entities; we’ve added two since then. Each one has its own function, but we are looking at how we could streamline things because there are a lot of meetings and whatnot. But the pro to that con is you have a lot more people engaged.
MG: Workforce development is a key issue for every community. Bowling Green has had a strong education initiative for six or seven years. Can you describe these development/talent attraction programs, what they’ve done, and further goals?
RB: In my first year here, talent really emerged as a thing we wanted to use to differentiate ourselves. Coming out of the recession, employers were already identifying struggles with finding the kind of people they wanted to be globally competitive. There was some initial work going on with The Leader In Me (talent program) in a couple of elementary schools, and we convinced our chamber board to take on a capital campaign to create the investment we needed to have a K-12 implementation of The Leader In Me. It’s (based on) Stephen Covey’s “7 Habits of Highly Effective People,” so it’s an ethics-based leadership program.
Our thought was, if we can develop our entire school system around ethics-based leadership, any hard skill we build on top of that would be better because it was built on a broad, sound ethical foundation. And that has proven to be true. We became the first community in the country to implement The Leader in Me across K-12.
At that time, we and our school districts were working with the Covey organization on refining the middle school curriculum they had, and they didn’t have a high school curriculum. We were part of their research and development; we appear in their book about what they’re doing. We have since taken the concept and created our own model, engaging with the Gallup Organization and Ford Foundation in addition to Covey, to create a leadership-infused career-academy model. We renamed the initiative SCK (for South Central Kentucky, our region) LAUNCH – Learning About Unique and New Careers Here.
In our region now, there are about 6,000 open jobs. Through SCK LAUNCH, we built a whole system around aligning K-12 and the public workforce system through those key sectors and their needs. We’re the only community in the nation that has the K-12 model built like we do and the public workforce system also aligned to those same sectors and demand data.
We have already invested $1.4 million. One of our entities took $200,000 from a land sale and invested that in creating both a machine tool program and a robotics program in the area technology center. We challenged local businesses to donate equipment. They donated $300,000 worth and we were able to create both a machine tool program and a robotics program. Those programs can train and educate 40 young people each year, so we’ve added 80 new candidates in those two critical shortage areas.
In early November, we kicked off a $3.6 million capital campaign to continue to invest in the schools. A large portion will go toward buying relevant equipment so the school career academies are able to educate young people on the current equipment they’ll see in the private sector, whether that’s health care or professional services or construction or manufacturing. The schools have been phenomenal at investing personnel and other resources into creating this plan.
MG: How do you assess the return on these investments?
RB: We’ve got about $1.1 million to $1.5 million allocated to talent recruitment. Based on the data we’ve looked at, we feel like we’ve got about a third of the workforce here we need to fill those 6,000 local open positions, and we have to recruit about two-thirds of the workforce. We’re gearing up a campaign to recruit individuals to our community. Those 6,000 jobs represent $1.35 billion more economic activity in our local economy if those jobs were filled today.
The annual Kentucky income tax revenue from those 6,000 jobs would be $11.8 million, even after deductions. So, investing $3.6 million over a five-year period can get us a $1.35 billion economic impact. We’re pretty excited about that return on investment! Jessamine County was just here looking at our schools, and Lexington will be here next week looking at our community and our schools.
MG: How was that exemplary level of partnership with the local school system created and sustained?
RB: We help the business community better understand what schools are doing, and help the education community better understand what businesses are saying, what business means. By doing that, we’ve built amazing partnerships.
One example is the area technology center where we set up the robotics and machine tool programs. We worked with our business base to help pay for the credentials test they need to take every year for three years. We’ve helped 100 percent of the kids get jobs before they graduated. Companies now have these young people straight out of high school, where in the past they weren’t hiring many directly from high school. They’re getting great results from these young people.
MG: Is the chamber proactively administering this?
RB: That’s us. The business engagement we’re doing is unprecedented. It is far bigger, larger than anything we ever assumed. Even before this capital campaign, we were doing the fundraising where there was a need. We’re doing the relationship brokering of connecting business with education need, and we’re helping to develop the programmatic elements of this.
We brought on a staff member from the education realm to help us create a kit for what we call SCK LAUNCH Experience. For three years now, 100 percent of our eighth-graders have learned about all of our key demand sectors, careers in those six sectors, what they pay and what the career ladder looks like. And then they all go to a hands-on career fair. That’s just the eighth-graders. The first year, we had 1,700 eighth-graders go to SCK LAUNCH Experience. The second year we had about 2,500. This year we’re getting close to 4,000 eighth-graders, because we’ve got districts from outside the 10-county SCK region that want to bring their young people. Every eighth-grader gets the seven-part curriculum, and then they meet with professionals in those areas and hear about careers. The business engagement there is huge.
MG: The Bowling Green Chamber administers SCK LAUNCH for 10 counties?
RB: It does. We work very closely with Bowling Green and Warren County Schools and invest in hard assets in those schools. And when you go on to high school, the model we’re talking about in Bowling Green and Warren County is about 1,900 young people per grade level in city and county schools. That means a work experience for 1,900 students every year before they graduate. You can imagine the doors we need to open in business to facilitate that. We’re also doing externships where we’re taking teachers into the workplace to expose them to the different careers that are available. The business engagement we’re doing through our chamber now is huge. We’ve made the curriculum available to the entire 10 counties. We helped apply for a grant; they put the curriculum in the hands of those other districts. But then it’s up to those districts to implement the curriculum; we don’t go in and do that. It’s delivered by teachers and educators in those districts.
MG: How many people does the chamber require to work this?
RB: Our chief operating officer has invested quite a bit of time. I invest quite a bit of time in that and oversight of our public workforce parallel to that. We have an education-related consultant on staff, and we’ve had a workforce coordinator on staff; those positions predominantly have done this work. When we get into the Experience event, then an event staff handles that. It’s been fairly ‘bootstrapped’ from a human resources perspective. We’re beginning to look at that (staffing) now, because we protected some of the intellectual property we’ve created along the way, and we’ve sold some of it. We’re putting 100 percent of those proceeds back into education.
MG: The Bowling Green Chamber has patented some of this program?
RB: We had a law firm help us protect some of the stuff we’ve created. And we’ve already delivered it. We got a grant from the state. And we delivered the model of the eighth-grade piece, SCK LAUNCH Experience, to Frankfort and to Paducah (schools). Paducah is doing its own event this year, and Frankfort is doing its event next year.
MG: These programs are getting some national recognition, and local officials are getting invitations to go share your experience. Can you tell us about that?
RB: We’ve presented SCK LAUNCH at various state conferences for a while now. We’ve met with various (Cabinet) secretaries and education leaders, the lieutenant governor and others to talk about it. More recently, a group called America Succeeds, which connects business interests with education, reached out to us. When they heard about what we’ve built, they said, “We really don’t have a category for you, but we’d like to invite you.” We sent our COO Meredith Rozanski, our point person, and she spoke to business leaders in Arkansas, who were blown away. That group invited us to come on its Age of Agility tour, whose second stop is in Washington, D.C., in January. So Meredith will go to Washington and present it to a larger group.
Sean Covey (president of FranklinCovey Education, which developed The Leader in Me program) and his friend, whom we’ve been working with since 2011, came to Bowling Green in early November to help us kick off the $3.6 million capital campaign. We’re working with Covey’s office to go present our model to the International Economic Development Council (5,000 members in the United States, Canada, Europe, Australia, New Zealand and other nations), and then the Association of Chamber of Commerce Executives, which is our national association. We’re working to get Sean on that agenda to speak about the model we’ve created, and the FranklinCovey organization has created a marketing video of what we’ve done here that they’re pushing out. They have a global footprint with The Leader in Me and the other elements that are education-based delivery of “7 Habits.”
MG: Bowling Green has had lots of significant economic development announcements the past few years, especially in the metals sector that supports advanced manufacturing. What is the strategy that’s produced that?
RB: It’s been a number of things. During the time that we’ve had the team assembled in Bowling Green, we’ve announced around $2.6 billion in capital investment with almost 5,500 new jobs by ‘targeted’ businesses alone. That doesn’t include investment in the TIF (tax increment financing) district downtown, it doesn’t include all the other commercial development. We’ve been ranked in Site Selection magazine’s top 10 for our size for economic development results for five years in a row now. This year and last year, we ranked second in the nation.
We have had some great metals-related projects. When Constellium-UACJ announced (a $150 million joint venture to supply aluminum automotive body sheet), that was the largest new manufacturing operation announced in Kentucky in 2016. When Bilstein Cold Rolled Steel announced, that was the largest new capital investment by a manufacturer announced in Kentucky that year. We’ve had some great expansions by Bowling Green Metalforming, adding 450 people. General Motors has been the big investor – almost $1 billion in our community through several iterations.
MG: What is a ‘targeted’ business, and what is the strategy to go after these projects?
RB: A ‘targeted’ business is one that does more than 50 percent of its business outside Kentucky, so they send either intellectual property or goods to other states and bring back new money, making the economy bigger here. Those kinds of companies focus in on about seven different subsectors, many of which are in manufacturing – automotive-related manufacturing, advanced manufacturing, food processing. We have targeted subsectors within that. Through our focus on that, we’ve been able to produce investment.
MG: For at least the past decade, there’s been discussion that Bowling Green and Warren County’s success has been achieved by a coordination of effort among the major players. Characterize the relationship among the chamber, city government, county government and Western Kentucky University when it comes to business and economic development.
RB: You’re spot-on. I’ve done this 24-plus years now; this is my sixth leadership position and the fourth state. One of the things that attracted me here when they did the national search was how well the community works together. The city and the county governments work extremely well together. Our different sectors work well together. So we don’t have that friction that sometimes holds communities back, which is a huge, huge positive for us.
Within the recent past we wanted to see what would happen if we actually got together and created an interdependent, strategic plan using the Covey principles; that’s where the (Bowling Green Warren County) Engaged Strategic Plan came from. We thought, ‘We do well just off the cuff working together; what would happen if we sat down – key business leaders from each of our six sectors, and then our institutional leadership – and we created a plan?’
We set aside money in the chamber budget for two years to pay for it, then we convened the leadership (in 2015). Two different consulting groups worked together on that for six or seven months of meetings. That’s where the Engaged Strategic Plan got its start. (See the plan at goo.gl/NMwHj4.) We’ve been working off annual action plans, supporting that broader plan, annually for a few years.
MG: Is there an understanding of how your area’s cooperative relationship among the major players got started?
RB: A lot of times it’s little, petty things that stand in the way. The one thing everybody says is: If people aren’t looking for credit, it’s easier to get more things done. We’re really focused on getting great things done for the community, and less so worrying about who gets credit for getting this or that done. That helps a tremendous amount.
This area’s been entrepreneurial for quite some time; you have businesses that started in the region and are still headquartered in the region. You’ve got leaders who reinvest their time and money in the community. This chamber building, which is 10 years old now, was built by the private sector. They came together and raised the money for it. It was a $4-4.5 million project. And that was the first investment in the downtown TIF.
MG: Does the chamber and business community have an agenda it hopes to see the Kentucky General Assembly pass in its 2019 session?
RB: Every year, we build a legislative platform. We advocate for pro-business initiatives primarily. We were the first county in the United States to pass right-to-work, and then we advocated for statewide passage of right-to-work. This year we’re building more collaboration with Owensboro, Paducah, Hopkinsville and others to advocate for us as a team. I think that’ll have more of an impact.
Workforce development is an area where there is consensus. The group is supportive of looking at the tax code to make it more attractive to keep military families in Kentucky or have those retiring or separating from the military come work here rather than other states. It supports enhancing the public workforce system, so it’s far more effective than it has been. We talked about the tax structure in Kentucky and how we might position ourselves on that. We talked about the infrastructure needs of the state.
MG: What about further change in the state tax structure, and addressing a still significant unpaid pension liability?
RB: Kentucky has some real fiscal challenges on pension, infrastructure and a number of areas. Our positioning has been to generate as much revenue as possible through growth. What does that mean in practical terms? In our area there are 6,000 open jobs. If we fill those 6,000 jobs, you’d have a huge multiplier effect: $1.35 billion in economic activity that’s now not happening because those jobs are not filled and $11.9 million in recurring state tax revenue. I’ve heard there are 140,000 open jobs in Kentucky. Applying that same math, we could have a lot more Kentuckians working and a lot more revenue to work with. Doing practical things like that and seeing what revenue you’re able to generate would be a good step forward before you start tinkering with other taxes and stuff.
Our position is geared strategically more to how you approach the state’s business plan and make us more competitive to win more (targeted projects), thereby generating more revenue and getting more of a multiplier effect, which even with lower tax rates would generate more revenue. Do tax policy in that kind of framework versus gouging this group or that group.
MG: As the state considers tax reform, many people point to the Tennessee consumption tax model of low or no income tax and higher sales tax. Bowling Green is the biggest Kentucky city near Tennessee, so what’s your perspective on the effectiveness of the Tennessee model?
RB: When you look at Tennessee, across the board it seems to be growing a lot faster than Kentucky. Part of it is tax policy, part of it is incentive policy, part of it is what they’ve done with talent with Tennessee Promise (a program that provides two years of tuition-free attendance at a state community or technical college) and other innovative things. I think looking at the Tennessee model bears a lot of good opportunity for us. We compete with Tennessee on a regular basis for projects, and they’re a very difficult competitor. From an incentive perspective, we don’t have the tools that Tennessee has; it’s a challenge to win when we’re competing with Tennessee.
But again, what are the sectors that Kentucky really wants to drive our economy with, and how do we tax business, how competitive are we in those sectors versus the other states we’re going to compete with? How do I take more market share? It really is that simple.
MG: Bowling Green has been pursuing a downtown revitalization strategy with significant success for a decade. Where do these efforts stand, and what further goals are on the table?
RB: Today, in the downtown TIF area, there’s been a total investment somewhere in excess of $300 million; $90 million of that was public investment. Forty different projects. There’s been a $79 million increase in payroll in the TIF over the last 10 years. Certainly SKyPAC (Southern Kentucky Performing Arts Center) is one of those major investments. The (4,559-seat) Bowling Green Ballpark right across the street from us is a major investment. The parking garage that serves both of those is downtown growth. That $300 million is outside of the $2.6 billion that I talked about from targeted businesses.
There’s a whole master plan for downtown. One of the things that came out of our Engaged Strategic Plan was the health-care innovation district over by what is now the new medical school. UK just opened a new UK College of Medicine-Bowling Green. That is – in my view – pretty phenomenal, getting a medical school. That doesn’t happen that often in the country.
MG: Bowling Green has been the fastest-growing city in the Kentucky since 2011. Why is this occurring, and has the business community been active in expanding housing?
RB: There’s been success because of the targeted-business strategy we’ve had and the economic success we’ve had in traditional economic development. Also, when you look at leadership in our different sectors, whether that’s health care or retail or restaurants or hospitality, they’ve also invested. They’ve also created jobs. You’ve got each sector of our economy hitting on all cylinders.
Also we’ve had an international center here – not many people know that – so there’s been some in-migration of internationals. We’ve got over 50 languages spoken in schools, which really surprises a lot of people. We’ve got a diverse business base. We have 20 Japanese auto suppliers alone. We have companies from Canada, Germany, Austria, Sweden, many places. The diversity of international people and international companies that are here surprises people.
With all that economic activity, we’ve had quite a bit of residential growth. You’re starting to see more people who were living in counties around the area and working in Bowling Green make the decision to live in Bowling Green, too. We’ve had both single-family and multifamily residential going. Lots of apartments. There’s not any road you can drive on in Bowling Green where you don’t see construction, typically of some sort of residential units. Increasingly now we’re seeing people move into the downtown area, which will really help us go to the next level of what we’re doing in downtown redevelopment. ■
Mark Green is executive editor of The Lane Report. He can be reached at [email protected].
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