Just how important is it to bring everything you’ve got to the game of economic development, a game at least partly built on the notion that those who schmooze the best win?
To hear Paul Dennis tell it, every move, every statement, every detail counts.
Inside his second-floor office on Main Street in downtown Washougal, Dennis, the former mayor of Camas and now president and CEO of the Camas-Washougal Economic Development Association (CWEDA), recently recalled the story of the mid-1990s battle between Portland and Austin, Texas, over which of the two metro areas would become home to a new Samsung Electronics fabrication plant.
Austin rolled out the red carpet.
Portland lost. The consequences still reverberate: This summer, Samsung announced it would expand its Austin plant with a $3.6 billion investment and 500 additional jobs.
These days, Dennis is focused on bringing economic victories to east Clark County. That means getting out of the office a lot to visit employers and paying attention to the details, including understanding the maze of municipal regulations so he can guide companies to building permits.
In May, east county leaders announced Dennis and his private consulting firm — Cascade Planning Group — would lead CWEDA, a creation of the Port of Camas-Washougal and the cities of Camas and Washougal.
In total, the port and the two cities have allocated $200,000 to pay for the nonprofit, with the port setting aside $100,000 (money it routed to CWEDA from a staff position it cut), and the cities each kicking in $50,000.
Dennis’ Cascade Planning Group, a kind of clearinghouse of market information to help companies make good business decisions, has done work for local governments and private companies across the U.S., including in Washington, Oregon, California, Idaho and Montana.
The following interview was edited for brevity and clarity.
What are three things that make you hopeful and optimistic about Clark County’s economic prospects in the months and years ahead?
We basically have two tax structures. We’ve got the Washington tax structure and the Oregon tax structure. Where Clark County can best position itself are in the small- to medium-size companies that are able to move but grow and are highly profitable.
The more your profit margin equals your gross revenue, the better the gross receipts tax (in Washington) looks versus a corporate income tax (in Oregon), which is looking at net income after expenses.
Even though we’re a distressed county, by being distressed there’s a savings (through tax exemptions available to areas with high unemployment rates) on the sales tax. If you’re a manufacturer, you don’t have to pay sales tax on the building construction or on the equipment. So, we have a small tools company that wants to relocate to the Camas-Washougal area. What they don’t want to do is pay past (sales and) use tax on all that equipment — they own millions of dollars of equipment. By having those tax incentives, that makes it affordable for them to move over here.
Another aspect is that if you have a family, this is a great place to have your business and raise your family, because we have good schools and a high quality of life.
What makes you pessimistic?
The regulatory environment, especially on the environmental side. I’m not saying we should pollute the air or water or that we shouldn’t have a high regard for the environment. We should. But it’s gone to the extreme.
We have a client right now who needs a sewer permit because they’re an industrial user. They need the state to buy off on it before they can discharge into the municipality’s sewer system. Their waste is hot water. They use water to cool their machinery. One would think that would be pretty easy to permit, but when you go to a state agency and they say it’s 60 days to five months, if you’re a business, can you wait five months? That’s where we’re able to facilitate the discussion, get the right people in place and help companies work though the regulatory environment. That’s really the value of my position.
The second is capital. It’s not real easy to go get bank financing. Then you look at China from a capital standpoint. The Chinese are continuing with a competitive advantage where companies can go get grants or no-interest loans, all kinds of funding from the private or public sectors. It’s incredible when you think about U.S. companies trying to compete.
Most of the companies I’ve visited here in the Camas-Washougal area — we’re talking larger companies — are poised to expand, either their labor force or just capacity. All of them are doing better than they were in fall 2009, which is great news. It’s really coming down to, can they get money cheap enough to really do the expansion they want to do?
What does the Camas-Washougal Economic Development Association bring to the table to help make things better?
One of the things we can do is play matchmaker. So, we’ve had companies say, “Hey, we want to locate in the Camas-Washougal area, what’s available to me?” They’ve already taken a look, and they might have discounted a couple of sites, but they’re still not quite sure, so they want a little bit more detail or ground truthing. So we’re able to help them with that.
Business owners know how to operate their business, but they don’t necessarily know the regulatory environment, and that’s where they need help, so I’m able to do that.
What can you tell us about how CWEDA will work with the Columbia River Economic Development Council? Some might say you’re a competitor to the Vancouver-based CREDC.
Thankfully, we talk, so we’re able to compare our notes and to be more collaborative. It’s not competition, because I really believe we need to coordinate and work in a more regional setting. We’ve got to recognize that there will be some movement, and we will try to attract each other’s companies. If the companies become stronger by virtue of their new location or how they’ve repositioned themselves, that’s great. That’s what we want because we want to keep the jobs we have. But we also have to recognize that we need to help create new businesses. That doesn’t mean you’re going to California or the East Coast to grab businesses and bring them here, but it could be folks who are here already who are trying to bring their ideas or products to market and to grow.
What I don’t want to do is, I show up one day, they (the CREDC) show up the next, or vice versa, and we’re stepping all over each other, and companies are going, “Gosh, who represents us?”
What can you tell us about what you’re working on?
For a long time, (the city of) Camas has had this high-tech investment credit, but it’s only applied to the major businesses in town. What I’ve been trying to do, in working with it and trying to expand it into Washougal, is have a development credit that recognizes the taxes a company pays or generates annually versus their initial development fees.
If you’re willing to invest right now, you can get your impact fees deferred — it’s a negotiated process for either city — for three or five years. What we’re working on is also during that deferral period, looking at the tax (revenues) that are generated (by a company), and if a certain threshold is reached, then offsetting a portion of that impact fee bill.
Bonnie Moore (CREDC’s director of business services) and I have been working on this idea to create some type of business accelerator program where you’re accelerating a product to market or business to market. My personal and professional belief is that there’s room for probably three (business accelerator programs). We have three ports, and so I look at it as having a program in east county, one in the west side, and you could have one in north county.
What books are you reading?
There’s a book called “Boomerang” (by Michael Lewis), and it’s about the collapse of the capital markets. It looks at Iceland, it looks at Ireland, the U.S. It looks at how out of touch the capital markets were before the crash.
What’s your favorite movie?
I’ve actually seen quite a few movies. It depends. If I’m with the kids, then usually it’s a kids movie. “Captain America,” that’s a great movie. That was actually well done. I’ve always liked “Captain America,” too, as a kid even.