CHARLESTON, S.C. — Every single economic development official in Charleston points to a single cataclysmic event that changed the city’s future: When the Navy closed the shipyards that had been in North Charleston since 1901.
The year was 1996. And until then, the sleepy port city hadn’t done much in the way of economic development. But the closure — taking with it 22,000 jobs that earned an average of $50,000 each — galvanized the city. In the years since, it’s focused on courting multinational companies and growing local companies in its five “high-impact clusters”: life sciences, advanced logistics, aerospace, automotive and information technology.
It’s worked. As officials told the group of 58 Colorado Springs officials, business owners and nonprofit leaders, the city is welcoming around 50 new residents a year, attracted by jobs with Boeing, Daimler Chrysler and Volvo, to name a few.
Those 22,000 military and civilian jobs have returned, with a focus on Naval cyber operations, information technology and a large Air Force presence.
How’d they do it? They say they did it mostly through public-private partnerships.
“The Navy base closing was a catalyst for long-term, sustainable growth,” said Bryan Derreberry, head of the Charleston Chamber of Commerce, which oversees three counties with a combined population of 750,000.
The chamber and the Charleston Regional Development Alliance work together to bring new companies in, while also fostering existing companies. While the populations are roughly the same in the two cities, the amount spent on economic development isn’t equal.
In Charleston, Derreberry said, The chamber has 37 employees and a budget of $5.6 million. It has a board of directors of 70 people and a 22-member executive committee. The economic development office has 18 employees and a $3.5 million budget.
“That’s 55 employees and a total of $9.1 million,” said Dirk Draper, president and CEO of the Colorado Springs Chamber of Commerce & EDC. “I’m a little envious.”
The additional money and employees means that the Charleston group spends a lot of time overseas, finding companies seeking a North American presence. Volvo is currently building its first North American plant in Charleston.
The two cities have other similarities as well. Charleston has a big tourism economy. The city itself is 120,000 people, but 5 million people visit every year. Colorado Springs has about 15 million visitors, said Doug Price, president and CEO of the Colorado Springs Convention & Visitors Bureau. He too, is a little envious of the CVB’s budget.
“Their hotel tax is 6 percent,” he said. “And the state [adds] a $1 per room per night to every bill. It’s voluntary, but in 10 years, no one has ever told them to take it off. It brings in another $3 million.”
That means, he said, the Charleston CVB is recruiting visitors with a much heftier budget than Colorado Springs, where the lodging tax is 2 percent.
“We’re punching way above our weight,” Price said.
So, how did this city become one of the most successful small cities in the nation? Through a series of five-year plans, focused on one thing: jobs.
“Our biggest asset, by far, is the port of Charleston,” said Charleston EDC President David Ginn. “It’s why Boeing came here, why Volvo is here. So now, we’re focusing on alignment of those jobs with our city’s values.”
The five-year plans are created with outside consulting firms and touch nearly 800 stakeholders. Every effort is made to include as many people as possible to find out what issues are out there.
“You can absolutely choke on your success,” Derreberry said. “You can overstretch the capabilities, you can run out of labor, you can find yourself in a situation where wages don’t go up for everyone — and that gap can just get bigger.”
So Charleston only focuses on the areas that make sense for it, he said. Its new five-year goals include: strengthening the entrepreneurial ecosystem, nourishing existing businesses, growing its workforce, balancing growth with the city’s historic nature and investing in infrastructure and communications to connect the community to the rest of the world.
Charleston officials said companies are interested in their infrastructure (with only one major highway onto and off the peninsula, traffic is a problem), their diversity and the “quality of place.” International companies want to know the city is “globally fluent,” Ginn said.
“They want to know that you understand other people’s cultures and traditions,” he said.
They shared the secret of being globally competitive with the group from the Springs.
“You have to know what they want from you,” Ginn said. “The top three: infrastructure, talent and quality of place to attract and retain that talent. If you can get those, they just don’t care.”
Colorado Springs doesn’t really seek international companies, Draper said. Over the past few years, officials have gone on a few overseas trips sponsored by the state Office of Economic Development and International Trade. Two years ago, Chamber & EDC Chief Defense Officer Andy Merritt went to a huge international aerospace industry convention held in Paris.
But the goal of the annual regional leaders trip isn’t to compare cities — officials in the Springs say its to take away lessons from other cities that they can put to use in Colorado Springs. The group of 58 splits into four different sectors during the two-day event: community investment and philanthropy, economic development/workforce, defense/cyber and innovations in health care, energy and higher education.
Colorado Springs Business Journal Editor & COO Amy Gillentine Sweet is reporting from the Regional Leaders Trip in Charleston, S.C.