Global Matters: In economic development, some inevitably fly away

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So Kestrel Aircraft, designer of the soon-to-be-but-as-yet-unbuilt Kestrel turboprop passenger airplane, has decided to send the vast majority of the aircraft’s future production to Wisconsin, rather than build the planes in Maine, as originally expected.

While Maine may still benefit from as many as 100 good jobs at the former Brunswick Naval Air Station, some 600 manufacturing positions are slated to go to Superior, Wis.

In the end it came down, as it often does in site location competitions, to a richer basket of incentives and enticements that, in this case, Wisconsin was able to offer.

Maine was left at the altar (or in the hangar, if you prefer) wearing a wedding dress purchased at J.C. Penney after Wisconsin showed up in a Bentley and wearing Dior.

Put another way, we tried to woo the captain of the football team with our sunny disposition and sensible shoes, but in the end he opted for the head cheerleader. As we shall see, it was ever thus.

Kestrel’s decision, of course, marked the formal commencement of the traditional Rite of Blame and Disparagement, which is characterized by finger pointing and the assembly of a circular firing squad from which, ultimately, no one benefits and few emerge unscathed.

Surely somebody, somewhere dropped the ball in managing Kestrel’s expectations; somebody, somewhere should have been more creative in developing a package of competitive incentives; surely more could have been done to assemble those complex New Market Tax Credits; clearly the state needs to get into the tax credit business; obviously the state needs to get out of the way and let the private sector take over. Etc., etc.

Blame game aside, however, the Kestrel saga is one that is replayed all over this country, in every state, every day, in communities large and small. There is a natural, human desire on the part of all well-intentioned economic developers, even the most seasoned and jaded veterans, to “land the big one,” i.e., to attract an employer whose investment can in one fell swoop be a game-changer.

Who wouldn’t want to be able to say that on his or her watch, 600 jobs were established, an idle facility was put to use, home prices began to climb, new businesses sprang up, tax revenues rose, and so on?

Nor did anyone in Brunswick or Augusta foolishly drink the Kestrel Kool-Aid. Kestrel had, and indeed has, many of the trappings of an economic development home run, including a credible management team, significant private investment and, above all, the promise of high-end manufacturing jobs.

In the end, however, it came down to the freebies, the tax credits, that someone else had in abundance and that we were unable to secure in adequate quantity.

It is very often the case in site location decisions that it comes down to the grants, or the tax credits, or the free land, or the free buildings, or some other giveaway that someone has, and that the company being courted needs in order to meet its ambitious goals. And Maine has learned, time and time again, that we can’t compete in the business attraction game if the ultimate determining factor in a company’s decision is cold, hard cash.

We have neither the money nor the philosophical bent to indulge every would-be employer’s dream when it shows up in Maine and touts its grandiose plans.

The bottom line is that we took a run at Kestrel and it wasn’t good enough. Should we learn some lessons from this? Sure. Should we beat ourselves about the head and shoulders and force someone, somewhere to wear a hair shirt? No way.

We do have to be true to ourselves. Economic development success is a long-term endeavor filled with unglamorous and small victories. The modest factory addition here; the fully occupied industrial park there; the new pier at the port; the slightly longer runway at the airport; a reliable, statewide broadband network. These are the building blocks that enable us to serve our current employers, and to effectively entice future employers.

But I’m all for pursuing the Kestrels of the world. It was a rational play, and you miss 100 percent of the shots you never take. I hope the remaining jobs slated for Brunswick materialize and double in a year.

Nothing ventured, nothing gained. We took a shot and we came up short. So, cease fire. Range closed. That’s really all there is to it.

Now let’s get back to work.

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Perry B. Newman is a South Portland resident and president of Atlantica Group, an international business consulting firm based in Portland, with clients in North America, Israel and Europe. He is also chairman of the Maine District Export Council.

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