NETWORKS, NeTREP board committees hold candid talks
Three meetings in one week drive potential action
by Scott Robertson
When the full boards of NETWORKS Sullivan Partnership (NETWORKS) and the Northeast Tennessee Regional Economic Partnership (NeTREP) met in late June to discuss a potential merger of their economic development efforts, the main action item instituted was the formation of three committees: one to discuss scope, another to discuss structure and a third to discuss governance. Several members of both boards expressed disappointment that the talks were being routed back from high-level to committee, however, so the leadership of both boards agreed that the three committees would meet once each, allow for a clear airing of concerns and possible solutions, and then report back to the executive committees of both boards, so that any loss of momentum would be minimized.
The meetings were held July 23-28 via Zoom. The first meeting, held the afternoon of July 23, focused on scope and purpose. The governance meeting was held the afternoon of July 27, and the structure meeting took place the following morning.
Scope and Purpose
“I think it’s important for us to get our thoughts on the table about what the scope of this organization needs to be from where we are now to where we’re going in 10-20 years, and keeping that in mind in our conversations,” Caldwell said.
Will Barrett began the conversation by showing slides with information on the purpose and scope of regional economic development organizations that cross state lines. While cautioning that this region can’t simply copy and paste what some other region is doing, Barrett said, “I think it’ll help start the discussion. They’re all kind of different but they have a similar mix (to ours).”
The first region identified as somewhat analogous to ours was South Bend – Elkhart, Indiana.
• Purpose: Increasing per capita personal income in the region, enhancing the economic well-being – the prosperity growth and inclusion of the region through an improved economic structure.
• Scope: Talent attraction/retention, industry growth, entrepreneurship, workforce development, inclusion.
The next was Quad Cities, which had several very specific demarcations of purpose, all to be achieved by the year 2030:
• To attract 54,000 more 25- to 34-year old professionals to make up 13.5 percent of the population
• Sixty percent of Quad Cities citizens will have post-secondary credentials
• Per capita will increase by 20-30 percent to $52,183
• Gross regional product will grow to $40 billion
• Poverty trends will reverse
• Civic pride will increase
Quad Cities’ scope:
• Drive business investment in core industries – leverage effective public-private partnership
• Advocate for cool places throughout the region and investments in all downtowns
• Grow the region’s population and create community leaders
• Help businesses succeed in uncertain economic conditions
• Provide stable backbone support to achieve the collective vision
Finally, the committee looked at the two regional economic development efforts underway in and around Chattanooga, the Greater Chattanooga Economic
Partnership and Thrive
The GCEP’s purpose:
• Increase Awareness of the 16-county Chattanooga region as a business location
• Accelerate job creation
• Generate capital investment
• Strengthen and diversify the 16-county region’s economic base
• Inspires responsible growth through conversation, collaboration and connection in the tri-state Chattanooga region
• Convenes stakeholders across the region to ensure that as it grows in industry, prosperity and population, the region preserves community and natural character for generations to come.
The committee then heard from Mark Fuller, principal of ROSC Global, the consulting firm that has been part of the regional economic development conversation since being brought in by private sector leaders two years ago. Fuller suggested the organizations had done the right thing by addressing purpose and scope first.
“I think purpose should drive scope,” Fuller said. “If you don’t know what you’re trying to do, why are you doing it? Let’s have a definition of victory before we mount up the troops.
“Looking around the world at organizations that have been more successful than not, one thing I could say is that they all have been purpose-driven. In fact, there is no real competitive organization that’s been built and sustained for any length of time that is not purpose-driven.”
Fuller also cautioned that organizations are generally more successful in meeting broad purposes than narrow purposes. “That doesn’t mean you don’t have specific metrics about the broad purpose – so you get specific metrics on per capita income or population growth, but a really prosperous region is paying attention to health issues, education issues and economic development in an integrated way, not one or the other.”
With all that as preamble, the committee got down to discussing purpose and scope. Philip Cox of the NeTREP board put forward the idea of population growth being well within the scope of the merged organization. Cox also pointed out weaknesses in the way the region is being marketed now, especially externally. “The most I’ve seen that have been promoted through economic development are just videos – there’s not a lot of good data.
“We’re in commercial real estate, and we had a possible tenant contact us. One of the brokers in our office had to find some information on the region. They had to go to three different sites. There was not a centralized place to get data. He spent three days gathering data.”
Most members of the committee agreed that the two existing organizations already have existing strengths in traditional economic development (through NETWORKS) and lifestyle marketing (through NeTREP), but that both organizations could benefit from a unified voice speaking to Nashville and Washington on both of those matters.
“I think scope would be traditional economic development and non-traditional tourism, marketing and workforce development. I know the entrepreneurship ends up being a bit of a catch-all, but some type of effort around that – probably with more alignment with some other organizations that already are out there on several fronts. And, I think another piece is some type of unified government relations effort at the state and federal levels so that when we’re going for something that really is going to make an impact in our region, we’re using one voice.”
Outgoing NETWORKS board chairman Bill Sumner summed up the afternoon’s discussions with, “to promote the people, culture and natural resources to grow the region’s economy and population.”
Barrett, the outgoing chair of the NeTREP board, began the meeting by stating that while most everyone has agreed that both the public and private sectors need to play a role in governance of regional economic development efforts, “there’s been a lot of talk too about who needs to be a part of this from community organizations, social organizations, the non-profit perspective.”
Barrett asked Rab Summers of Summers-Taylor, a member of the NeTREP board, to recall the last regional economic development effort, the Regional Alliance for Economic Development, a decade ago, and comment on what lessons could be learned from its governance. Summers said only that the previous effort, “didn’t have much, to be honest with you.”
A copy of an Alliance marketing piece was shown that included private sector leaders at the front of the document, but relegated public sector players and economic development professionals to the back. Not-for-profit sector leaders were not mentioned.
Summers referred instead to the current governance of NeTREP. “It has been operating with a fairly large board, but a focused executive committee,” Summers said. “You don’t get anything done in a meeting with 30 people or more.”
Summers also lobbied for a preponderance of private sector representatives on the executive committee. “The private people are much more likely, in my mind, to be regional.
“It’s going to be hard for Kingsport, Bristol or Johnson City elected or appointed officials not to have more concern about their home community, whereas businesspeople don’t really care as much. If it lifts up the region, it’s going to lift up them.”
Barrett suggested having a large steering committee or board that gives general direction, with, “an executive board that is 10 folks or less that meets more frequently and accomplishes a lot of work.”
Wes Stephanian of ROSC Global suggested that whatever the governance turns out to be, it achieves active participation, inclusion and voice for public, private and non-profit entities.
Bristol, Tenn., City Councilwoman Lea Powers pushed back against Summers’ supposition that the public sector entities would be less inclined to be regional in mindset or action. “Should we try to limit the public sector’s participation?” she asked redundantly. “I think it would be unfortunate for the organization itself.”
Powers said the public sector will continue to communicate with taxpayers what’s being done in economic development and, “it’s going to be our economic development staff that’s going to go back and work with the private sector.”
Johnson City Mayor Jenny Brock then said preparation and planning on the front end could prevent some public/private acrimony. “This has to be a very high-level functioning corporate board that has fiduciary responsibility and that is statutorily empowered to do certain things. I think politics has to stay out of it, and I think one of the key things is that that board be set up with a very strong set of bylaws that govern the board itself, so that if you do get a rogue person appointed to it, it’s still going to be able to be governed through that structure.”
The city government of Bristol, Tenn., showed up in force for the meeting on the topic of structure. Four-fifths of the City Council was on-hand, leading some to wonder off-line whether the meeting constituted a sunshine law violation. Mayor Mahlon Luttrell was joined on the call by Powers; Margaret Feierabend, immediate past mayor and city councilwoman; and Chad Keen, city councilman.
In her introductory remarks, Feierabend said, “I think trust is huge and I think we are lacking a lot of it in our area. I think it’s critical to moving forward, so I think trying to figure out the best ways that in any process we’re building trust at the same time.”
Fuller followed Feierabend’s statement with an invitation for everyone to be totally honest during the discussion. “Whether it’s trust, whether it’s fairness, whether it’s inclusion of the smaller communities, I think it’s really important that this group be very frank and candid with one another, that we can enhance the building of that trust. No organization of this kind is going to function properly if there isn’t clear communication and if there isn’t an increasing level of trust.”
Fuller also cautioned against trying creating a structure which tries to do too much too soon. “I think it’s really important that we identify the core, the fundamental, the absolutely-required set of activities that the organization must deliver, as opposed to all the activities it might perform over time.”
Feierabend pointed out that the other regional organizations referred to in the first committee meeting are all “mature.” She asked that more research be done to see what those organizations looked like when they started out. She then suggested that the group step back from merging, saying, “Maybe it’s more coalition work before it’s all under one umbrella.”
Powers followed that up with another suggestion that perhaps a step back might be in order, merely because Bristol has invested so much in doing things the way they have been done. “We (Bristol) have had a dedicated employee economic developer for the past 20 years in Bristol, and now we have actually three (Tom Anderson, Matt Garland and John Luttrell who works in economic development and community development and relations) and we work with April Eads at BTES. Along with that, as a part of NETWORKS, we have worked very diligently to develop product and the result of that is the BTES Business Park, Partnership Park II…We have spent 20 years positioning ourselves for where we are now. It didn’t just happen overnight.”
Responding to Keen’s earlier rhetorical question of “What have we got to lose?” Powers said that because Bristol taxpayers also pay Sullivan County taxes, they are essentially paying twice to support NETWORKS and its $15 million bonded indebtedness. “We can’t walk away from that,” Powers said. “And so to come into a new organization, what more is that going to cost us financially, given the fact that we have our own internal constructs through our three economic developers that are being paid by either our utilities’ rate payers or through our tax revenue?”
“I always like the thought we may be small in size but we are mighty in actions,” Powers continued. “We’ve been very pragmatic and we’ve been very disciplined financially to do what we have done and so now it’s like there’s going to be this new construct of which we will be in a much-diminished capacity. How do we guarantee our position moving forward at the capacity we are now? In an organization where we may not have as much of a voice, what we rely on that trustworthiness to assure us that it’s all going to be just fine.”
Powers went on to list private sector actions that have eroded her trust in the process, including the ramming through of the Appalachian Highlands brand and the radio silence from NeTREP when she asked that they put forward a competing plan in response to NETWORKS CEO Clay Walker’s “Right Time for the Right Organization in July 2019.”
Outgoing NETWORKS Chair Bill Sumner agreed that more transparency will be necessary moving forward. Some people in Kingsport equate regional economic development with Ballad Health, which they view negatively, he said.
As the meeting was winding down, Barrett suggested that he, Caldwell, Cox, David Wagner and Jeff Dykes, representing the boards of both organizations, take what had been discussed in the three committee meetings and open a dialogue with the First Tennessee Development District’s board, which is made up of mayors of every city, county and town in the eight northeasternmost counties of Tennessee.
Feierabend expressed concern that none of the NETWORKS executive committee members are public sector representatives. Sullivan County Commissioner Mark Vance told the committee, “I truly believe if it came today to the point of decision-making the county commission would not support this.”
“That’s very alarming,” Vance went on to say, because we could be turning down something that could be very beneficial for this whole region. I think we’re going to have to better communicate with our elected officials and work this thing at a slow pace.”
Powers volunteered to represent the public sector when the group meets with the FTDD.
Fuller provided closing remarks, saying, “at the end of the day, this does belong to the people. They are going to be the beneficiaries or the victims of all that we do, and their fundamental needs have to be kept in mind as we’re doing it. The second thing has to do with focus. We as a region are disproportionately inwardly focused. I think keeping in mind the voice of external constituencies – tourists, potential investors, etc, is very important. I’ve spoken with potential collaborators in Virginia and they all say the same thing, which is, ‘you guys have to get your act together and speak with a single voice.
“The last thing I want to say is moving towards as close as possible to a one-stop shop is the best demonstrated practice around the country and around the world…I personally believe the need is urgent now. Some comments have been made that we are behind. But, the flip side of being behind is the genuine wealth of opportunities. It’s an opportunity-rich region by any standard, so if we can get a greater level of trust and a greater level of cooperation, I think those opportunities can be realized.”