More wins, losses expected in bumpy economy

Region has had a slow bounce back from Great Recession.

The Dayton region swung wildly between bad news and good news in the last few months— from the FAA’s snub of the Ohio/Indiana proposal for designation as one of the coveted drone test sites to a Chinese company’s decision to build a new $200 million windshield factory in the hulking former General Motors truck plant in Moraine.

Experts say more of the same “win some, lose some” pattern can be expected going forward.

“You’re going to have wins and losses,” said Montgomery County Commissioner Dan Foley. “If you win, that’s great. That means jobs like the Moraine facility. If you don’t win you’ve got to pick yourself up and and just keep pushing.”

For the Dayton-Springfield area, which lost 37,600 jobs between December 2004 and December 2013, it is a slow push back from an 11.1 percent 2009 unemployment rate.

“Moraine lost 10,000 jobs and we are growing back in hundreds of jobs,” Moraine City Manager David Hicks said after the Chinese auto glassmaker, Fuyao Glass Industry Group, said it would bring to 800 jobs to the former GM plant. “Do you say the glass is half empty or half full? We are going to say the glass is half full. I have to be a cheerleader.”

The Dayton Development Coalition was in the middle of both the decision by the Federal Aviation Administration to bypass Ohio and Fuyao’s announcement to build its factory here. The coalition assists local jurisdictions in their development efforts and orchestrates state-funded grant and loan programs targeting entrepreneurs and high-tech businesses. Its role expanded in 2011 when it was named western regional partner of the states’s privatized development arm, JobsOhio.

Jeff Hoagland, coalition chief executive and president, said the public/private partnership “brings a variety of perspectives and expertise which increases our chance of success.”

“We approach every opportunity as a partnership of local, regional, state, public and private interests,” Hoagland said. “We realize that we can’t win every deal with just the private sector, or just government assistance. It is almost always a combination.”

It has not been revealed how much in public incentives the state offered Fuyao to come to Ohio.

The coalition focuses much of its efforts on protecting Wright-Patterson Air Force Base from budget cuts and leveraging its presence to attract high tech-businesses and research. The base is the state’s largest single employer with nearly 28,000 employees, according to the most recently released statistics. Those jobs indirectly support 34,185 jobs off base, according to the 2012 Wright-Patterson Economic Impact Analysis.

The coalition had a huge win in 2005 when 1,200 jobs were added to Wright-Patterson with the relocation from Texas of the U.S. Air Force School of Aerospace Medicine and the 711th Human Performance Wing. The new jobs triggered the largest building boom on the base since World War II.

Two more recent efforts involving the coalition were disappointments, however. In April 2011, NASA rejected Dayton’s proposal to house a retired space shuttle at the National Museum of the U.S. Air Force. Congressional leaders and the coalition hoped to land the shuttle to boost local tourism.

The coalition also spent more more than $1.5 million of taxpayer money on the failed attempt to win federal Unmanned Aerial Systems testing designation from the Federal Aviation Administration. The money was part of a $10 million state award to promote UAS and defense-related economic development efforts and prepare for any future BRAC plans. Coalition and local officials say losing the FAA designation will not deter them from continuing UAS development efforts, and they say the money helped set up the UAS Center and Test Complex in Springfield .

“The long-term value of our efforts will be significant and to call the entire effort a ‘failure’ would be irresponsible,” Hoagland said. “The true failure would have been for Ohio not to compete for the FAA designation at all.”

Dayton Area Chamber of Commerce President and CEO Phillip L. Parker blamed politics for the lack of success in capturing a space shuttle and the UAS test site designation.

“We were snubbed,” he said. “I do not hold the coalition accountable for that bad political decision. You just can’t always control that.”

Over the years, area officials and the coalition have worked on repositioning the region to become less dependent on automotive manufacturing. The focus is on growing high technology businesses, advanced materials and advanced manufacturing, aerospace/defense, and the biosciences, Hoagland said. The region also is capitalizing on its geographic location and presence of two major freeways, Interstates 70 and 75, to lure logistics and distribution companies.

“The way you wind up at the end of the day a little bit ahead is by keeping your focus on what the regional priorities are, and that is something that the coalition helps us do,” said Mickey McCabe, University of Dayton Research Institute executive director and vice president of research.

McCabe praised the coalition for navigating competing efforts by three local cities to land the General Electric’s EPISCenter, a research and development facility partnering with the University of Dayton. Dayton ultimately won the center, which currently employs about 85 people.

Other big wins in recent years are the the Caterpillar Logistics Services distribution center, with about 600 employees in Clayton; and the Collective Brands (Payless Shoes) distribution facility, which has more than 480 employees in Brookville.

Some economic development initiatives are clear success stories while others take time to develop or, in some cases, fail to get off the ground.

The coalition’s Entrepreneurial Signature Program, a public/private investment fund, gave loans to 33 companies, with a new deal being finalized for one more loan. Six of the companies have paid back what they received, four firms no longer exist and the rest remain active in the program, according to coalition statistics.

Composite Technical Services LLC, which received a loan from fund in 2012, has struggled to find footing in a tough economy since it opened in 2009, said Chief Executive Officer Enrico Ferri.

“When we first started we had a great business plan and a great hope to raise quite a bit of money,” Ferri said. “We had to change our goals midway and that’s when the coalition came to help us.”

The coalition’s annual report in 2009 said the company created 18 jobs. But Ferri said changing market conditions created some huge challenges. Employment peaked at seven employees in 2011 and dropped to two as of January.

The company, one of seven located in the National Composite Center in Kettering, makes resins out of soybean oil.

“We have developed some really good technology systems,” Ferri said. “The question is whether they can make it into the market. That’s the hard part. It’s always a question of making sure whatever you have invented finds its place.”

Another small business helped by the ESP program, Commuter Advertising, recently announced that it has expanded beyond its Dayton headquarters and opened offices in Toledo and two other states.

McCabe said the fact that many of the new high tech companies do not employ large numbers of people is not reason to lose hope.

“If you have a hundred of these three-men shops there might be 20 of them that grow to 50 or 60 people over five years,” he said. “Is that a 5,000 job thing like GM had? No. But it can turn into thousands of jobs.”

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