Private funds can aid economic development

Published 12:00 am Tuesday, June 17, 2003

Let’s say a business wants to expand. It’s looked at several locations and narrowed the decision to a few cities with similar advantages &045; but it needs a new building to get the expansion started.

All of the communities want the new jobs, but one has been stashing away private funds through a major capital campaign soliciting local businesses. And part of that

private money is what’s going to build the

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company’s new facility.

It’s oversimplified, but a

similar scenario happened for Starkville.

When Service Zone wanted to locate in that community, the inbound call center needed a building. Private funding of Starkville’s development authority helped build that facility &045; and brought 600 jobs to the area.

&uot;That is a way we’ve been able to levy public and private funds,&uot; said Marc McGee, vice president of properties and research for the Greater Starkville Development Partnership, which is funded through public and private monies.

Soliciting pledges from private entities has been a matter of convincing businesses that the investment matters, McGee said.

&uot;We have a mindset that people are willing to move forward,&uot; he said.

In Brookhaven, private money has helped secure economic projects by helping a company to buy land or build a facility. But private funds are also earmarked for a new industrial park and for workforce development &045; including helping existing industries, said Chandler Russ, executive vice president for the Brookhaven Chamber of Commerce.

The chamber of commerce in Brookhaven is the umbrella organization for all of the development groups, so it administers the funds.

Brookhaven began a capital campaign called the Vision Partnership three years ago, seeking $1.5 million in pledges over five years.

So far, that money has totaled $1.1 million, Russ said.

Brookhaven hired a consultant to help with the fund-raising, which Russ recommends because it is such a time-consuming process.

&uot;It involves an enormous amount of time to make sure it’s successful,&uot; he said.

Some communities in Mississippi &045; particularly those with successful economic development agencies &045; don’t have set-aside incentive funds, but they do use private dollars in a variety of ways.

In Tupelo, the Community Development Foundation has used private funds to aid in technology improvements and other assistance for its economic development work, said David Rumbarger, CDF’s director. The CDF does not use private funds directly as incentives for industry, he said.

The most recent capital campaign in Tupelo &045; Future Focus &045; raised $1.5 million over five years.

Other &uot;small-dollar funds&uot; from private interests have been used to match grants, Rumbarger said.

&uot;We’ve come up with that locally, just by passing the hat,&uot; he said. &uot;We wish we had a sackful of money to offer industries.&uot;

Likewise, Vicksburg and Warren County’s economic development alliance doesn’t specifically have an incentive fund for industry. But part of the strategic plan calls for a capital campaign, said director Jimmy Heidel.

He pointed to successes in other communities &045; such as Jackson County, which just raised $4 million in pledges over five years.

&uot;This thing has gone from industrial development to community development,&uot; said Heidel, noting that using private dollars can help a community expand its ideas about economic development. &uot;To me, if the private sector is not involved in your community, your resources are not very good.&uot;

Hattiesburg does not have a designated incentive fund, but private money raised through capital campaigns has helped &uot;accelerate economic development,&uot; said Area Development Partnership President Gray Swoope.

The ADP has used that private money &045; also collected through dues from its 1,000 members &045; to help with such items as relocation expenses for new industry employees.

&uot;The key to our success is that 65 percent of our budget is private,&uot; Swoope said.

Hattiesburg’s ADP is in its third capital campaign, looking to raised $1.75 million over five years. Among the plans are a new spec building, marketing programs, a technology park and workforce development programs.

Swoope said the key to raising that money is begin able to produce results.

&uot;We did exactly what we said we were going to do,&uot; he said. &uot;If someone trusts you with private money, you’d better deliver.&uot;

Development agencies have to take care when mixing public and private funds.

The Starkville Greater Development Partnership, an umbrella group for both public and private entities, sought state attorney general’s opinions to make sure it was handling money properly, McGee said.

&uot;We use private dollars for investment,&uot; he said.

Private funds &045; whether they simply help run the economic development agencies or are used in incentive plans &045; aren’t the only key to economic development.

&uot;By no means is it the answer,&uot; Russ said. &uot;You’ll never be able to buy a project straight out.&uot;

But while other factors can get a community on the list to be considered, financial incentives can close the deal.

&uot;When it comes down to two or three sites, it helps to make sure you’re on an even playing field &045; or it helps push you over the top,&uot; Russ said.

Kerry Whipple

is editor of The Democrat. She can be reached at 445-3541 or by e-mail at