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Heather Mosley | SBJ

SBDC Fills Lead Funnel for Project Investments

SBJ Economic Growth Survey: Capital

Posted online

After a record-breaking 2020 with $289 million in local capital investment pledges, 2021 is sizing up as a quieter year, say Springfield Business Development Corp. officials.

SBDC, the economic development arm of the Springfield Area Chamber of Commerce, was a contributor to the nine project wins in 2020, including Amazon’s warehouse in Republic and an expansion at The Kraft Heinz Co. The nine projects combine for 1.9 million square feet in absorbed or built space. That followed six projects announced in 2019, which collectively were estimated to generate $88.3 million in capital investments, including $14.3 million in new payroll and 321 jobs.

Chamber President Matt Morrow says four projects have been announced through September, including a planned $5 million investment from Lebanon-based The Durham Co. for a new manufacturing plant in Buffalo. Durham plans to add 50 jobs. Morrow anticipates a couple more project wins could 
be announced before year’s end.

“We typically have between 10 and 20 projects that we’re competing for at any given time,” he says. “Right now, we’re on the lower end of that.”

However, Morrow says the lead activity for SBDC, which works to attract and retain businesses in the Springfield region, is higher than it’s been in years. It’s currently at 42 qualified leads – already above the typical yearly average that floats in the low- to mid-30s, he says, noting the coronavirus pandemic likely played a role in the rise.

“But for the pandemic, this probably would have happened last year,” Morrow says of the high number of leads. “There’s just a ton of economic activity going on, and there was a pause that hit in terms of growth. We’re probably seeing a resumption of a lot of planned activity from last year that would have hit but got delayed.”

He says the average size of buildings also is trending up among this year’s leads, increasing to 265,000 square feet from 119,000 just two years ago.

John Deere Reman is among the wins SBDC cites for this year. Moline, Illinois-based Deere & Co. (NYSE: DE) announced in March it would expand the remanufacturing division in Springfield. The local plant is in the process of adding 130 employees to its workforce, as well as transitioning the company’s drivetrain and hydraulic remanufacturing operations from a facility in Edmonton, Alberta, Canada, which is closing, officials say.

“That enabled us to really consolidate our operations in one location and leverage the capabilities that we have here and build on our remanufacturing here in Springfield,” says John Deere Reman General Manager Jena Holtberg-Benge of the company’s $10 million investment.

Holtberg-Benge says moving the equipment, which includes the Edmonton plant’s axles, transmissions and hydraulic components, as well as the job additions, is a gradual process. She expects the local workforce, which was around 400 employees in March, will be close to 500 by the end of the year.

“I wish we could do it all at once,” she says. “Given the labor market right now, it’s impossible to hire 130 people all at once. You’ve got to really phase it in. Every two weeks, we bring in a whole new batch of employees and have them go through a training program.”

For the local expansion, John Deere Reman used state incentives through the Missouri Works and One Start programs of the Missouri Department of Economic Development. Missouri Works helps businesses access capital through withholdings or tax credits, according to the DED website, and Missouri One Start provides workforce strategies.

“SBDC was really instrumental in helping us navigate the Department of Economic Development requirements for incentives,” Holtberg-Benge says, noting an undisclosed amount of funds goes toward onboarding and training employees in a course started with Ozarks Technical Community College. “We’ve developed a hands-on curriculum for the three days that gives them a chance to test their skills on tools and lifting devices – basics of manufacturing, essentially. So, they’re not coming in cold to our factory. It’s been very helpful.”

Aid from SBDC also was valuable to IsoAge Technologies and its commitment to expand in the Queen City, says Robert Brooks, senior vice president, technical and regulatory. The food ingredient maker has owned a 90,000-square-foot plant on Scenic Avenue since October 2018 and transitioned its manufacturing center to full capacity in May 2019. Chamber officials began talks with IsoAge in March 2018, with Springfield beating out Illinois and Kansas to keep the company in town.

“Having these conversations allowed us to continue to focus on our business rather than spending this time researching options available in each of the areas under consideration,” Brooks says via email.

IsoAge took advantage of Springfield’s enhanced enterprise zone program, qualifying for 50% reduction on property taxes for 10 years, and it utilized the Missouri Works program, according to past reporting. Brooks says the local plant now employs 15. Since IsoAge’s expansion, Brooks says it caught the eye of another ingredients company, Ireland-based Kerry Group. Kerry acquired IsoAge in late August 2019 for an undisclosed price. It continues to do business as IsoAge Technologies, he says, noting local growth plans aren’t imminent. 

“We are always considering every opportunity for growth and expansion,” he says. “The site in Springfield was specifically selected with an eye for future expansion opportunities.”

Connections made with IsoAge and John Deere Reman are part of the everyday work for SBDC, Morrow says, adding the chamber wants to be a primary point of contact for companies seeking expansion or relocation opportunities.

“Typically, we work with them to be sure they have an opportunity to get their questions answered about infrastructure and utility service. Those questions don’t always go to the same place,” he says, noting those connections include city and county governments, colleges and universities, as well as utility providers. “We try to keep forward motion on the project so that it’s always on the front burner.”

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