The biggest Northeast Wisconsin business news story of 2009 — perhaps of the 2000s so far — was the efforts to convince Mercury Marine to choose Fond du Lac over Stillwater, Okla., for its manufacturing operations.
The work by state, Fond du Lac County and City of Fond du Lac officials, as well as those involved in economic development, in keeping Fond du Lac’s largest employer in Fond du Lac (“#1 on the water, and in Fond du Lac,” Marketplace, Sept. 29) may have seemed to the public like a hasty, Herculean effort.
While the effort probably was Herculean, the work was far from a last-minute effort.
Brenda Hicks-Sorensen, executive director of the Fond du Lac County Economic Development Corp., first heard about Mercury’s issues in March.
“It was immediately what do we need to do, what are the issues with the company,” she says. “We knew what was happening in the marine industry well before this started happening.”
Fond du Lac, home of Mercury Marine’s world headquarters and outboard manufacturing, was competing with Stillwater, Okla., where Mercury’s MerCruiser stern drive division was based, in a battle between 850 Fond du Lac jobs and 380 Stillwater jobs.
“We were able to do our homework with what we believed Oklahoma was going to come forward with in March or April,” says Hicks-Sorensen. “The nice thing is we really weren’t guessing with the numbers.”
Meetings between FCEDC and county and city officials and Mercury Marine began in April. On Sept. 4, members of International Association of Machinists Local 1947 agreed to labor contract changes, enabling the move of Mercury’s Stillwater operations to Fond du Lac.
“It was a very proud moment for me, because it reiterated what wonderful things we already had happening in economic development,” says Hicks-Sorensen. “It was amazing how everybody came together to get it done. It sealed the deal that Fond du Lac County is a great place to do business.
“I’ve talked to my colleagues, and that’s not happening in some communities. In larger projects, that’s where a lot of times that tends to bog down, and that didn’t happen — no one had ego. To me, it showed what was right in our county.”
Mercury’s problems were a combination of the financial problems of Mercury’s parent company, Brunswick Corp., and the world economic slowdown. The solution, in Mercury’s eyes, was to reduce manufacturing costs, ultimately by consolidating manufacturing facilities.
“The majority of it is really the global economy, so lots of what Mercury was facing has to do with what’s happening in the global marketplace,” says Hicks-Sorensen. “Locals don’t have that much of an impact necessarily — roads and services.”
But in this case, “locals” had a great deal to do with keeping Mercury in Fond du Lac.
The first $20 million of Fond du Lac County’s $53 million contribution to the $123 million Mercury Marine incentive package went to the company just before Christmas. The county is giving Mercury Marine a $50 million “low-interest, performance-based, collateralized” loan, with $20 million going to the company this year and $10 million in 2011. The City of Fond du Lac is contributing another $3 million in a combination of loans, grants and a land purchase. The state is contributing another $70 million, mostly in refundable tax credits based on the number of jobs created or retained in Fond du Lac.
“You always have concerns about your largest employer closing or dramatically changing the way they look,” says Hicks-Sorensen. “We’ve had some issues with other major employers, maybe not as publicly.”
The funds generated by the 0.5-percent Fond du Lac County sales tax won’t go just to Mercury’s incentive package. About $500,000 of sales tax proceeds will go to a new locally controlled revolving loan fund. FCEDC currently administers two loan funds:
The Fond du Lac County Revolving Loan Fund, which loans $20,000 to $300,000 to eligible businesses for start-ups or existing businesses, at up to $20,000 per full-time job created. Recipient businesses must make 51 percent of jobs available to “low- and moderate-income individuals.”
The Fond du Lac County Small Business Revolving Loan Fund, which loans $15,000 to $100,000 to businesses of up to 50 employees and up to $1 million gross revenues.
More than $10 million has been loaned since 2000, according to Hicks-Sorensen.
“The FCEDC has been very aggressive in soliciting funds to fill gaps in communities,” she says. “We’ve been able to create a lot of new funds to fill those gaps where private borrowers aren’t able to finance.”
Cities and villages can create Tax Incremental Financing districts to fund infrastructure improvements. Counties can’t.
“Counties have very few tools available to them under state statutes,” she says. “The sales tax is one of the few tools — most companies use sales taxes for property tax relief, and economic development is definitely property tax relief.
“On the one hand I think there’s always more things communities can do for economic development, but there need to be enough resources. I think what the Mercury Marine situation showed is that we already are pretty well coordinated.”
In 2009, FCEDC launched Impact!, described as an “economic gardening program” — supporting existing businesses through, according to FCEDC’s Web site, “providing access to technology for finding or expanding sales opportunities, creating supply chain efficiencies, and understanding competition.” Impact! is funded through a $437,899 three-year grant from the U.S. Department of Commerce Economic Development Administration.
Fond du Lac County also offers 10 business or industrial parks, six of them in Fond du Lac.
FCEDC’s strategic plan targets seven industries: advanced manufacturing, including machinery and metal manufacturing; advanced materials; agriculture, food processing and technology; biomedical and biotech; fossil and renewable energy; printing and publishing; and transportation and logistics.
Besides targeting specific industries, the strategic plan (available at http://www.fcedc.com/sft386/currentfcedc5yearstrategicplan2007to2011.pdf) includes goals of, by 2011, creating 2,500 new jobs exceeding the county’s median hourly wage of $14.71 per hour, assisting the creation of $80 million in capital investments in the county, and facilitating “an environment conducive to attracting and keeping the level of talent necessary for our businesses to gain and maintain a competitive edge.”
“We have a really solid strategic plan,” says Hicks-Sorensen, “so we’re going to continue to move forward.”
