Grandview takes unusual approach to economic development

09/24/2013 10:58 PM

09/24/2013 10:58 PM

With a new interstate highway and redevelopment in the offing at Truman Corners, officials in Grandview have decided it’s time to change their game plan for economic development.

Aldermen recently approved a year-long experiment that changes what was formerly a staff position into a contract with a four-person team from Zimmer Real Estate Services. Two team members — Troy Nash and Kelvin Simmons — have extensive political connections that city officials hope will help swing some big deals Grandview’s way.

They made the change after Alan Kenyon, the city’s economic development director for six years, retired in May, said Grandview Mayor Steve Dennis. The city put out a request for proposals for someone willing to do a one-year contract. The Zimmer group was chosen from a pool of 17 applicants, about half of which were teams, Dennis said.

The Zimmer team had the advantage of good connections, he said. Nash is a former Kansas City councilman. Simmons, also a former councilman, is a former Missouri director of economic development and commissioner of the state Office of Administration. The other team members are Stacy Sedler, of Sterling Consulting Group, and Nick Parker, marketing manager at Zimmer.

The city is paying the team $119,000 and providing some office space at City Hall. That compares with about $105,000 in salary and benefits for the former full-time staff position. The contract got the unanimous approval of all four aldermen in attendance.

The city liked the “holistic approach” the team presented, which included outreach to businesses about what they want and need, said Assistant City Administrator Kirk Decker.

Economic development work has become more complex and needs a wide skill set, said Dennis. “It’s not just doing pure sales work,” he said. “I think it’s going to be very exciting.”

Hiring an outside business to scout for developers has some potential pitfalls, but Dennis said the city was careful to discuss them during the interview process.

For instance, there’s a possibility that developers may be wary of talking over deals with people who may end up being competitors. And having a real estate company working on development deals for the city also has the potential for conflicts of interest.

“We asked quite a few questions (on that subject) in the interview,” said Decker. But ultimately, the city staff was comfortable that conflicts wouldn’t be a problem. For one thing, the contract is for a limited time and the team must show some progress toward development during that time, he said.

Dennis also pointed out that the team has signed letters of confidentiality about its work with the city. And developers who don’t want to divulge any secrets to the Zimmer group can also talk directly to the mayor or city staff, Dennis said.

“I’m still playing the role of economic developer,” he said. “We’ll pick and choose what we let them in on.”

The stakes are high. Redeveloping Truman Corners, near U.S. 71 and Blue Ridge Boulevard, has been on the city’s wish list for years. Now it looks as though the time has come.

The shopping center, open since 1957, is due to become Truman Marketplace in about a year, with retail and community gathering space included in the roughly 600,000 square feet. Developers are expected to close the deal in November to purchase the property. The $83 million project will be funded by a special taxing district and private equity.

The city also would like to see more development on its outer roads, the Missouri 150 corridor and its downtown, Decker said.

Outsourcing economic development is not unheard of among city governments, said Dean Katerndahl, director of the government innovations forum at the Mid-America Regional Council.

Cities have been known to contract with local chambers of commerce and real estate firms for specific projects, he said. It’s a little more unusual for them to use a firm for general economic development.

The firm has a lot of contacts that could be useful, he said.

“I don’t see any real down side,” he said. “It will be an interesting sort of experiment, and one that other communities will be watching.”

Grandview isn’t the only city tweaking its economic development plan. Last spring, Lee’s Summit also eliminated the economic development director’s job.

Instead of having one staffer just devoted to economic development, the city created a new position that combined the economic development duties with those of an assistant city manager and human resources director. Since the city did not have an assistant city manager before, there was no immediate budget savings.

City leaders want to focus on speed and efficiency, said Daren Fristoe, who holds that position. Hence, the city will launch a new development center to make the application and permitting process more streamlined for developers.

Lee’s Summit will look at redevelopment and infilling city spaces as well as new development, he said.

“There are a number of opportunities we’re working on right now,” he said. “We’re excited about where we’re going.”

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