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Ingram’s Magazine recently convened its annual assembly of business, government and regional economic development leaders to assess both the strengths and opportunities of the region, as well as some of the challenges it faces. The task at hand was nothing less than to imagine the economic destiny of Greater Kansas City. Hosting the event in its 24th-floor board room high above the Crown Center complex was the law firm of Shook, Hardy & Bacon.
Ably co-chairing the assembly were John Murphy, the chairman of Shook Hardy, and Sly James, the mayor of Kansas City, Missouri. The session proved to be informative and highly productive, addressing such topics as the need for greater regional collaboration on business incentives, the potential for developing a more entrepreneurial public policy, and strategies for more effectively communicating Kansas City’s wishes to elected officials at the state level.
Moving Forward
Paraphrasing the memorable quote of the Tim Robbins’ character in the film, The Shawshank Redemption—“Get busy living, or get busy dying”—John Murphy said, “We have to get busy moving forward or get busy falling behind.” The question he raised was what Kansas City was doing to move forward and fortify its position as a regional economic hub.
Said Jim Rine, the eminently youthful president of UMB Bank’s Kansas City region, “I think there are quite a few things we’re doing right.” He was particularly excited about BNSF’s Logistics Park Kansas City intermodal facility in Edgerton. He observed that Kansas City is No. 2 in the nation in rail freight, and advancing. “I think not many folks in Kansas City are aware of that,” he said.
Kevin Trimble, CEO for Saint Luke’s North, pointed out one opportunity that should not be overlooked: the First & Second creeks’ watershed, which includes 15,000 undeveloped acres in the Northland. That land is uniquely situated, connected from the airport to Downtown by the railways, and that, said Trimble, “gives us an opportunity to start from a clean slate to plan something very methodical and in a proactive manner that can benefit all of Kansas City.”
Mark James cited the work of one of MCC’s partners, Cerner Corp., which he noted was “involved in what could be the largest expansion project Kansas City has seen, perhaps ever” with its proposal for south Kansas City. He cited the way Cerner has helped create innovative programs, even in the high schools, to develop a talented local work force.
“I would hold them up as an example of a company that is very proactively engaging entrepreneurialism and trying to figure out how to work with education,” said James. “Cerner has been doing similar things with us,” said Michael Droge, pres-ident of Park University. “It’s just great.”
Entrepreneurial Environment
As Terry Dunn pointed out, one of the “Big 5” ideas of the Greater Kansas City Chamber of Commerce was to position Kansas City as America’s most entrepreneurial city. This designation has focused considerable attention on Kansas City’s existing resources and helped area leaders appreciate the region’s formidable “entrepreneurial ecosystem.” He wondered what those assembled could do as business leaders working together to really improve the entire environment.
One of the complications in improving that environment, volunteered Dave Frantze, co-chair of the Real Estate Practice Division at Stinson Leonard Street, is the difficulty of gaining trust from both states, the suburbs as well as the cities, in pursuing major projects.
Among the projects on the table that needs area-wide buy-in, Terry Dunn noted, is a proposed new airport. “Whether in Wyandotte, Johnson, Jackson or Cass County,” said Dunn, “it really doesn’t matter. It’s the same problem and we as 2.2 million people need to come together and figure out what kind of airport do we want that’s going to meet our needs for the next 25 to 50 years.”
Ed Eilert, chairman of the Johnson County Board of Commissioners, agreed that “what happens at the airport is of significant importance to all of us in the metro area and certainly Johnson County,” but, as he acknowledged, cooperation across the state line has worked in the past only “in a limited way.” In the case of the airport, however, he believes there “is a metro-wide recognition that we need something better than what we have.”
“Our challenge is to come together with purpose and focus as a regional community,” affirmed Jim Heeter, president and CEO of the Greater Kansas City Chamber of Commerce. He saw the need for city leaders to assess their place in the national and global economy, and to fashion a well-focused strategy on ways to realize the region’s maximum potential. “The communities that do that are going to be the winners,” said Heeter, “and the ones that don’t are going to fall behind.”
Livability
For all the jurisdictional divisions in the region, Eilert called attention to “something organic” about the Kansas City metropolitan area that makes people want to be here or more importantly, to stay here.
There was general consensus that Kansas City’s X-Factor was livability. It was suggested that there was a tangible explanation for that livability, namely that Kansas City has more freeway lanes per capita than any city in the world. This fluidity lessens traffic congestion and stress and improves the “niceness” factor.
“I think you have to be careful about boasting about [freeway miles],” cautioned John Murphy. He argued that young, talented people want a viable urban core and walkable spaces. “They don’t like cars as much as everybody in this room likes their cars,” he noted.
“We have the Country Club Plaza and a Downtown that didn’t exist a few years ago, and some other areas, but we don’t have that dense, livable, live-work-play environment,” affirmed Margaret Bowker, Vice President at J.E. Dunn Construction. “That’s what we hear the folks under 30 are craving.”
Maurice Watson, chairman of the Husch Blackwell law firm, challenged the city’s racial divisions. African-Americans, he suggested, “don’t feel there is a significant community here from which they can select both friends and spouses.” As he noted, all cities aspire to diversity, “but if the evidence doesn’t support it, all you’ve got is really a slogan.”
Watson attributed the lack of minority concentration, in part, to the city’s excellent freeway system. “Middle-class black people don’t live in the city in Kansas City,” said Watson. “It has become so easy because of our freeway system to move in every direction away from the core of our city.”
Job Creation
Mark James questioned whether the area’s economic-development entities, including municipalities and states, have done enough to create more and better jobs. “I think they do an admirable job,” said Greg Swetnam, director of office brokerage for Kessinger/Hunter & Co. “They are fast, and the information is accurate.” He believes that these ED entities deserve much of the credit for getting Kansas City on the short list for consideration of corporate relocation or expansion.
Terry Dunn argued that quality jobs today are in the fields of science, technology, and engineering. He wondered whether we are “talking to and working at the right level with higher education to have the quality workmen come forward who can really grow our economy.”
One of the differentiators for a community, said Maurice Watson, is whether it has a critical mass of research universities and other educational institutions to prepare students in the areas of science and technology. “We can improve in this area,” he said, “and if we get this right, we will have a real advantage compared to other communities.”
“It’s about talent development and talent acquisition across the entire knowledge supply chain,” said Pete Fullerton, CEO of the Economic Development Corp. of Kansas City. He believes it is critical to see where the existing gaps are and fill them.
Terry Dunn talked about Baltimore’s efforts to turn its focus inward. Since 95 percent of the jobs created in Baltimore are coming from Baltimore itself, 95 percent of the city’s ED budget is internally focused. The Baltimore ED people contend that the externally directed campaigns are about 30 years out of date. Dunn suggested there was wisdom in focusing on local companies that are entrepreneurial, helping them to grow and to acquire other companies.
The Kansas City Area Development Council has obviously been focused on attracting companies from outside, noted Pat McCown, CEO at McCownGordon Construction, but he, too, thought that growing the companies from within Kansas City had real merit.
“You can’t divorce the two,” said John Murphy of internal growth and external recruitment. You can’t not keep your businesses here and grow and hope to attract new ones.”
“I think the underlying theme that everyone keeps talking about is jobs,” said Greg Swetnam. “When a company looks at Kansas City to grow, the No. 1 question is not real estate. It’s not the state line. It’s jobs.”
Maurice Watson wondered whether the issue was really jobs or “talent.” Said Swetnam, “It depends on the industry. Right now when you look at Kansas City, the engineering firms are all exploding. Every single one.”
“We are known for a skilled work force,” said Nancy Russell, the executive director of the Institute for Workforce Innovation at MCC. “We are positioned very well. So that’s our opportunity, to build on that real work force.”
The MCC Foundation recently did a survey, said its executive director Kent Huyser, and it confirmed that “the trend we heard overall was people’s concern about the shortage of skilled workers moving forward, particularly in the STEM areas.”
Image
As to the question of whether Kansas City has a national image and what that image might be, there was no consensus. “We don’t know what our image is to go sell it to somebody,” said Dave Frantze. “We’re a good, nice place to live, but I don’t think we have a compelling story.”
“How do we fix that?” asked Terry Dunn. John Murphy volunteered that the KCADC is working with talent coordinators from Sprint, Cerner, Garmin and other high-tech companies, but their focus was relatively narrow.
Mark James suggested that city leaders should be thinking on a scale that goes beyond KCADC. “Is this something that is critical enough for Kansas City’s future that we should really think about how we make that of strategic importance?” he asked.
Maurice Watson questioned whether residents would be willing to trade off livability for growth. “It would change us as a community if we had 800,000 to a million more people. There would be good and some bad around that.”
“People like living in the world’s biggest small town,” observed Don Greenwell, president of The Builders’ Association. If residents have a hard time conjuring an image, he argued, it may be because they are content with what they have and choose not to see beyond it.
Republican National Convention
Among those projects that can elevate a city’s image is the hosting of a national political convention, which Kansas City last did in 1976 when it hosted the Republican National Convention.
Terry Dunn, who with his wife Peggy is serving as fundraising chair, provided an update on Kansas City’s efforts to recruit the 2016 Republican Convention. “I think we have a good opportunity,” said Dunn. He sees the real value of hosting a convention in branding.
According to Dunn, those who have measured past efforts in Tampa and St. Paul believe there’s close to a half-billion dollars’ worth of economic branding that the community enjoys with a successful effort. “We have a unique opportunity to have the world focus on Kansas City,” says Dunn, who is of the opinion that Kansas City is one of the top three to five candidates to secure the convention.
“If we get our act together, we probably have a higher probability of success,” Dunn noted. Here the state line works to the city’s advantage, given that the area has both Republican and Democratic governors and a mix of Democratic and Republican officials across the area.
Big 5 Initiatives
Two years ago, the Greater Kansas City Chamber of Commerce launched a series of five major initiatives. Greg Carlson, director of global facilities construction at Burns & McDonnell, argued that it was essential that we continue to pursue these initiatives, so central are they to the city’s future.
“I would say overall, we’re doing extremely well,” observed Jim Heeter. He noted that one of the five goals had already been accomplished: Kansas City’s hosting of a world symposium on ani-mal-heath science.
Heeter also expressed optimism about the creation of UMKC’s Downtown arts campus to complement the Kauffman Per-forming Arts Center. “When this happens,” said Heeter, “we will create an environment where we will retain and attract a bright, energetic, creative group of young people.”
Tom Turner, executive vice president of Grandbridge Real Estate Capital, put the Downtown arts campus atop of his list of Big 5 initiatives. “We just need to remember we’re one city,” said Turner. “If we can’t resolve the border wars, then a lot of the other efforts really go to waste.”
Steve Dunn, chairman of J.E. Dunn Construction, addressed one of the Chamber’s long-term initiatives, the revival of the urban core, specifically Kansas City’s black community. Dunn is particularly keen on creating a serious vo-tech school to address the problems of a high drop-out rate and low levels of employment.
“The fact of the matter is that what we are doing in Kansas City is quite uni-que,” said Terry Dunn. “We basically are addressing three segments of life—health and safety, education and economic opportunity.”
One of the strategies of the initiative is to empower neighborhoods to learn what they can do to set their own objectives and take control of their own destinies. “If we can do this as a community,” said Dunn, “we can make Kansas City a very, very unique model for the rest of this country.”
“This is one of the Chamber’s Big 5 which we hope will endure,” said Heeter. “This is a marathon. This is not a sprint.”
Capital Formation
As part of the Chamber’s effort to position Kansas City as an entrepreneurial hub, John Murphy asked about the availability of venture capital.
UMB’s Jim Rine noted that a lot of work has been done locally to help entrepreneurs find angel investors, but the banks have a distinct role. “We supply debt, not capital,” said Rine. The bank also provides resources and counsel for start-ups.
“If someone’s starting a company,” affirmed Mike Viazzoli, CEO of Bank of Kansas City, “they have to understand what they need to do in order to be successful and get that next level of capital.” He noted that there are several levels before an entrepreneur gets to a lending institution.
“We don’t have the [VC] institutions here,” said Jonathan Kemper, at least not like they have in northern California, “but if you look at it, there are a number of people who are really excited about investing in risk situations.” He cited the growth of Garmin and Cerner as testament to the possibilities in this market. To grow, said Kemper, “You need to have especially talented people who want to take risks, and we all need to support that, whether it’s the banks or the businesses.”
Tom Metzger, president of Bank Mid-west, spoke of how venture capitalists have invested in the animal-health corridor, the geographical stretch between Manhattan, Kan., and Columbia, Mo., which includes companies that account for a third of the worldwide activity in that field. “They have to come to the Kansas City region because that’s where it’s happening,” said Metzger.
Terry Dunn observed that entrepreneurs were clustering and coming together. He cited the Kauffman Foun-dation’s 1 Million Cups program and the connectivity provided though KC SourceLink. “From what I understand,” said Dunn, “the money is out there, and it will flow.”
Ed Eilert pointed to the success of the Enterprise Center of Johnson County, which helped launch Mid-America Angels, an investment group that has sponsored roughly 65 companies over a 10-year period of time. “The big need in this area is for that second level, the mezzanine financing just beyond the startup,” said Eilert.
The Next Step
As a way of wrapping up, Terry Dunn asked those gathered their thoughts on what Kansas City needed to do as a region to grow 2–3 percent a year and reach the next level of national significance.
“It isn’t important what our size is,” said Tom Turner. “I think it’s more about being a leader in everything we do. That is what attracts people, attracts attention, attracts pride locally.”
Bill Ebel, the city manager of Over-land Park, agreed. “We know who we are, we know what we’re good at, and that’s what drives everything that we do,” said Ebel. In Overland Park, that means a focus on the quality of life. That, Ebel believes, is what brings people to his community or any community.
“The livability factor is significant, no question about it,” said David Gentile, president and CEO at Blue Cross and Blue Shield of Kansas City and a native Chicagoan. The challenge, he noted, is to keep the urban infrastructure strong while at the same time allowing suburban communities to stay strong in a suburban environment. Collaboration, he believes, is the key.
Kansas City’s development of a Down-town performing arts environment “is very unifying,” said Pat McCown. “It is something that is defining Kansas City.” What McCown likes about this development is that it was generated internally and yet has the potential to define us nationally, even internationally.
“I think we sell ourselves short,” said Tom Metzger. Dave Frantze agreed. “If we all lived next to Lake Superior, we’d call it Lake Pretty Good.”
“A lot of people from east will come out to visit and spend a weekend with us, saying, ‘gee, I didn’t realize this was here.” Metzger continued. He cited our quality of life and the great amenities for a city of our size. “We have things we need to work on? Yeah,” said Metzger, “but I think we really need to take advantage of our strengths.”
