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Economic path seen in expansion

Retention, growth of existing businesses get focus over trying to attract new ones

Image provided by Square Deal

An employee at Square Deal Manufacturing is shown welding at the company’s Marathon facility. In 1998, Square Deal started with fewer than 10 employees and has grown to more than 300.

Cortland County Legislature Chairman Charles Sudbrink fears the county’s tax rate makes it unappealing to the large outside companies he’d like to come to the county to help its economy.

The tax rate can be a hindrance, particularly competing with other states, said the county’s top economic developer, but that’s not the main issue. The work force is.

And the main focus today isn’t attracting large businesses, said Garry VanGorder, executive director of the Cortland County Business Development Corp. It’s growing the ones we have.

“Offices, like ours, in Central New York, across the state, are now tending to focus more on the retention and growth of existing business, as much or more than they’re focusing on recruiting new business,” VanGorder said.

The examples of how that works are already here: Square Deal Machining in Marathon, Forkey Fabrication in Cortlandville, the coming Actuant facility in what used to be a Smith Corona parking lot and a demand for health care workers to feed the county’s fastest-growing industry.

Business competition

One reason for focusing on existing employers is the intense amount of competition among counties and states to attract new businesses, VanGorder said.

About 20,000 business development services across the nation are looking to attract the same companies, said Andrew Fish, senior vice president of business development for CenterState CEO — an economic development strategist and business leadership organization based in Syracuse.

Whether the county is looking to attract a new business or expand an existing one, VanGorder said, it must be on its A-game to give the companies a reason to do so.

Among the selling points Van-Gorder uses:

• Central location, with an Interstate, large airports to the north and south and good rail infrastructure.
• Cheap real estate.
• Close proximity to Canada.
• Safe community.
• Good schools.

• And a good, hardworking labor force.

But even if a company likes what the county has to offer, there still has to be space for the company, and most importantly a work force.

Business development issues

Plenty of people in the county are willing to work hard, VanGorder said. There just are not enough of them.

“Not being able to fill jobs now is holding back the local economy,” VanGorder said.

Part of that problem is the companies needing to hire people don’t have positions that anyone can just walk into and do, he said. Work force training is something being talked about across the region, he said, more and more to combat the issue.

“We need to figure out how to get people looking for work into jobs,” VanGorder said.

Fish also stated there is more of a need to attract a work force, rather than a company.

When companies are looking to develop in Cortland County and ask about it having an organized labor community, VanGorder said the answer is usually positive, depending on the size of the company. But it’s hard to guarantee 400 workers if a company says it needs that many. It is hard to get people to drive from another county to work at that place if they are not going to be paid well, he added.

“I think the BDC/IDA is doing a great job trying to attract business, but when the businesses start comparing Cortland County to other neighboring counties and neighboring states, we’re not too attractive,” Sudbrink said.

However, VanGorder said: “If we’re growing organically, those companies are already familiar with the tax environment, so they’re making the decision to stay in the county for other reasons,” he said. “Where it hurts us is with companies that may be looking at us compared to Pennsylvania or Ohio.”

Sometimes the location can override the tax concern, due to what it can provide, such as the county’s selling points.

Focusing on existing businesses

Like the Cortland County Business Development Corp., Fish said on a regional level, the focus is also shifting to the expansion and growth of current businesses.

“The reality is over 80 percent of job growth on the national level is due to existing companies expanding where they are,” Fish said. “It is easier to keep customers than get new ones.”

Recently in Cortland County, Actuant Corp. decided to expand its operations from River Street to a new 35,000-squarefoot facility in Cortlandville, VanGorder said. It is so the company can expand its medical device manufacturing, eventually adding at least 50 new jobs.

“We were up against competition from Actuant’s home turf in Wisconsin,” VanGorder said. “They could have put the plant in a number of locations, We had to work hard to ensure it was located here. I think they wanted to be here, but companies understand the competition is stiff for capital investment and job creation.”

Entrepreneurship

Part of growing new companies in the county comes from entrepreneurship. VanGorder said the Business Development Corp. tries to capitalize on programs provided by organizations such as the Cortland Downtown Partnership –– which has an entrepreneurship program for SUNY Cortland and Tompkins Cortland Community College students.

The program helps students take their ideas from a concept to a reality, said Adam Megivern, executive director of the partnership. The partnership’s building at 40-42 Main St. will become a Business Innovation Center, he said. The first floor will have retail space and the second will have space for entrepreneurs to grow and develop a business idea.

“Young companies account for almost all net positive job growth,” said Zachary Shulman, director of Entrepreneurship at Cornell University. “They’re always hiring.”

It is important for students that want to start a company to do so while they are still students, he they fail — which most do — they learn and try again.

And if the students succeed, they may stay in the area, which adds to its economy, he said.

The two most important aspects to starting a business are doing a customer discovery and planning ahead. Shulman said you need to know if what you’re selling is something people actually want.

And, pending success, you need to understand what it takes to scale a business up.

VanGorder said it is important to try and keep those starting a business in Cortland County to stay in the county.

Continuing to grow

The county has growth potential, which will be important in the coming years VanGorder said. Part of that is having the needed resources available.

About five years ago, the county built its 135-acre business park in Cortlandville. VanGorder said that was instrumental drawing Byrne Dairy to build a facility in the park, because the million capital investment in the community and creating about 150 new jobs, he said.

There are other sites, either empty and ready for a new company or the county is working to acquire to make as a new development site. VanGorder said there are long range plans and initiatives in place.

For existing companies, Van- Gorder said he tries to build relationships with managers and stay on top of what’s going on. He wants to know any issues they face to try and help. That helps them grow in the county.

VanGorder said Square Deal Machining Inc. of Marathon is another example of a local business that has grown over the years.

Square Deal started in 1998 with one machine room and fewer than 10 employees. Now, 20 years later, the business has grown to a 300,000-square-foot facility with more than 300 employees.

“Growth is driven by the continued reinvestment of the company,” Joe Morgan, CEO of Square Deal, said last year.

Forkey Construction & Fabrication can tell a similar story. Charles Forkey Jr. founded the company as a second job in 1981, and opened a Lapeer shop in 2003, then moved to Cortlandville, where it now employees more than 100 people.

Getting a company to stay or attracting one to the county can be complex, VanGorder said.

“I am hopeful,” VanGorder said. “I think we’ve been on a pretty good run. I think there’s a lot of appreciation in the region and in the state for what Cortland has done and is doing, and we’ll keep plugging at it.”

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