Despite COVID-Related Disruptions, Team NEO Says Region Poised for Strong Economic Development
By Kim Palmer, Crain's
Business development organization Team NEO has some standout numbers so far in a difficult year, having assisted with $2.5 billion in new capital investment from 44 economic development projects estimated to generate more than 4,200 jobs and $225.8 million in annual payroll.
And the organization's CEO, Bill Koehler, is optimistic about the region's economic landscape for next year and beyond.
"We expected there to be some very significant disruption in the economy, which has happened for a lot of companies," Koehler said in an interview. "But what is interesting is that some of that disruption transformed into very significant strategic pivots on the part of a number of companies that found ways to use it to grow."
In its role as a regional economic development driver, Team NEO works with public and private partners to "accelerate business growth and job creation throughout the 18 counties of Northeast Ohio," which includes helping companies expand or relocate here.
That work is represented by capital investment, jobs and payroll growth in the region, and, before the final 2020 wrap-up, Koehler said the numbers might see a surge that could exceed what Team NEO saw in 2019. He said the organization has 146 projects in the pipeline, which is "larger than normal, and (with) a larger number of jobs associated with those projects."
These pipeline projects are not made public until Team NEO announces them or, in many cases, tax credits or loans associated with the projects are announced by the state. Koehler said some of the pipeline projects include out-of-state companies expanding in or moving to Northeast Ohio.
"Many of these projects demonstrate and validate the importance of manufacturing to our regional economy," Koehler said.
He said he's aware there are many businesses and industries in the region that are struggling. Nonetheless, "We have a number of manufacturing companies that have done very well because they are associated with essential businesses or have been successful making PPE, or they have been successful in finding the right way to pivot in a challenging environment," he said.
Some of the region's businesses discovered new ways to leverage on shoring opportunities, Koehler said, pointing to Akron-based GOJO Industries, which ramped up production of hand sanitizer to meet pandemic demand but needed help acquiring caps and pumps that had been produced overseas.
Team NEO connected GOJO with resources and using a JobsOhio grant brought that production in-house.
JobsOhio, the state fiscal partner of Team NEO, announced in March that it would invest more than $250 million in new programs "designed to soften the impact of COVID-19 on Ohio's small businesses and workers."
"A few of the success stories involve companies that felt they needed to bring products they were making elsewhere back to the region, to be produced here or find a supplier to fill a gap so that they have ready access to that component," Koehler said.
Team NEO also announced in June that Carvana, an online used car retailer based in Arizona, had committed to build a $23 million, 200,000-square-foot facility in Lorain County.
The Carvana project is one of three facilitated by Team NEO this year, representing a total of 1 million square feet of new and renovated space, that employed the state's Ohio Site Inventory program. The site program was launched by JobsOhio this year and offers resources that include grants and low-interest loans for site and building development. (Two other projects using that program are expected to be announced before the end of the year.)
Infinium, a commercial glass-wall producer based in Strongsville, represents another growth story helped by Team NEO. Working with local government and state partners, Team NEO helped coordinate the infrastructure for the 17-year-old company's new, 130,000-square-foot office, research and production space that's slated to be completed in the summer.
Shawn Gaffney Jr., Infinium's vice president of operations, said he worked with Team NEO, the city of Strongsville and the Ohio Department of Transportation to build out the company's new site so that the company is able to receive raw materials and ship finished product across the country.
"There was not a ton of appropriate 12-acre parcels that would allow a manufacturing facility to the size and scale we needed," he said. "The site that we are building on now required a bit of development. It was not ready for the contractors to drop off their equipment and build."
Without Team NEO's help negotiating the construction of a functioning truck route as well as a bridge, the multimillion-dollar building might have been forced to move to another city, he said.
The new building was part of the strategic plan well before the onset of the global pandemic and is necessary for what Ryan Gaffney, Infinium's director of business development, thinks will be an uptick in businesses.
"We did not have the year we drew up on paper, but it was better than last year and we continue to grow," said Tom Fritsch, director of sales operations for Infinium, adding that the company's strong regional and domestic business is what has helped keep sales relatively stable.
Ryan Gaffney thinks lingering COVID-19 concerns most likely will mean fewer open-office designs, and it follows that things could get hectic quickly for the company. Infinium has made substantial investments in new product design and workforce, with hiring across the board.
"We saw, as the unemployment pool was growing, that there were a lot of talented individuals on the market," Shawn Gaffney said. The company made a point of searching out workers for every part of the business.
"We have probably added more than 10% of new employees to our entire team," he added.
The company's main competition is international, Fritsch said, which makes the strong relationship with its domestic supply chain a benefit and bodes well for increased business in 2021.
"We are very much selling the idea of moving back to private offices," Fritsch said. "We are expecting a tidal wave of work. There are a lot of big jobs out there on pause, and we have planned for the day all those phone calls come in and things are really moving again."