Northwest Business Magazine

Positive Signals Indicate a Year of Growth

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Around our region, sprigs of new business growth are leafing out. Discover what projects are in the works and what key metrics point to a good year for economic development.

Business-Economic-Outlook-AG16

There’s a scene in the movie “Jaws” where three shark hunters compare their scars. Each man had harrowing experiences they lived to tell about; each emerged indelibly marked. The scars, though faded with time, would never be fully erased.

The events that caused them were extremely painful, but as time passed, something amazing happened. Those memories of harrowing times morphed into reminders of survival. Scars turned into stories that could be shared, even laughed about and learned from, to better prepare for the future sharp bites that life occasionally brings.

Similarly, painful memories of the recession that began in 2007 still ling er in our region. With the emergence of each positive economic indicator, the scars of that experience fade a little more into memory – never fully gone, but surviving as badges of honor.

In this new economic recovery, communities across our region are showing they’ve learned from experience and persevered through the ups and downs. Each community bears its own scars and lasting pain, but each feels confident that 2016 is a year for positive growth.

Promising Metrics in Beloit

Recent growth at high-tech companies like FatWallet and Comply365 are good indicators of the rising economy, says Andrew L. Janke, economic development director for the City of Beloit. But software companies are just the start.

“Unemployment has fallen steadily for the past two years and Beloit, currently at 5.4 percent, is at a decade area low,” he says. “All major economic indicators for Rock County, as a whole, are trending up.”

The local economy showed impressive progress in 2015, generally echoing positive indicators on the national level.

“As the national economy continues to hum along, we would expect the same to continue for our community and region,” Janke says. “Last year was a strong year, with the greater Beloit region tracking 17 economic development projects that may create up to 449 new jobs, leverage over $880 million in investment, and result in the construction of 545,456 square feet of space. We hope to match that pace in 2016.”

Many Beloit industries continue to see strong growth, with food processing, advanced manufacturing and logistics leading the turnaround. As these sectors expand, area economic leaders plan to focus particular attention on business retention and talent recruitment, says Janke.

Another good sign of the times: With so many companies growing and expanding, finding good workers and ample production space is becoming more vital. Janke expects these challenges will influence a number of policy decisions over the year to come.

“As the economy continues to improve and as companies have located and expanded in the greater Beloit area, workforce development issues continue to be challenges,” he says. “Competition for skilled workers will require employers to be more and more creative and competitive in their recruitment and retention efforts. Low vacancy rates for quality industrial space will continue to be a challenge for our area, as companies looking for existing industrial space are currently unable to find what they require in the marketplace.”

Looking Ahead in Oregon

Terry Schuster, commissioner of economic development & budget/finance for the City of Oregon, Ill., isn’t focusing on the scars. His sights are set on the future.

“It’s taken rural communities longer to recover from the economic impact of the recession, but I do see it happening, and we’re choosing not to look at setbacks; we’re looking forward to positive actions,” he says. “There’s definitely a sense of excitement in the air. The community as a whole seems to have a sense of anticipation for its future. Within the past year, we’ve completed an expanded Casey’s facility and added a new full-service Ace Hardware. Several new restaurants have opened. Three large commercial buildings that had been vacant for years have been purchased locally and are undergoing renovation. Our library is expanding and a local bank is building a new downtown facility.”

As a whole, the Oregon area has been luckier than some communities, says Schuster.

“We’ve been fortunate that our major industrial and business employers have not been impacted by job losses as significant as many other small, rural communities,” he says.

The pace of improvement is palpable.

“Our manufacturing industries are growing and are searching for qualified, highly skilled employees, and we’ve added a significant amount of new jobs in wholesale pharmaceutical sales,” Schuster says.
The commissioner credits two factors with driving a renewed hope. For one, the dynamic Chamber of Commerce has been investing in events and skills development. At the same time, the local school district has been exploring non-traditional teaching methods to help students develop new skills and interests.

In one promising sign, the city also has reopened an undeveloped subdivision and negotiated for high-speed fiber Internet service at each parcel – a first in northwestern Illinois, says Schuster.
From a tourism perspective, Oregon is looking to capitalize on bicycle enthusiasm and a new network of bike trails nearby.

“We have nine long loops around the county that start and stop at a new viewing stand which will be completed by early summer at our historic depot,” Schuster says. “And, the Chamber is promoting ‘bike-friendly’ businesses in and around the area.”

Quality of life – for tourists and residents – remains a top priority this year.

“We have active community involvement with one of the best park districts and recreational opportunities in northern Illinois,” Schuster says. “We have exceptional municipal services – water, fire, police. We’re creating an exceptional level of quality of life for a city our size.”

There are plenty of successful towns that Oregon could model itself after, but Schuster believes the city will make its mark by forging a unique path.

“It’s not about Oregon trying to be another Galena or LeClaire,” he says. “It’s about Oregon growing in success based on the people, resources and historical legacy that already make us who we are.”

Dreams Come to Fruition in Rockford

The largest community in the region continues its steady pace of recovery. An unemployment rate that was nearly 20 percent six years ago has fallen 13 percentage points and continues its downward trend. Long-term projects are coming to fruition. Positive signs abound.

“The Rockford region has many things to be excited about; the ongoing investment of more than $1.5 billion is certainly cause to celebrate,” says Michael Nicholas, president of Rockford Area Economic Development Council (RAEDC). “The economic conditions vary by cluster, with some decreases in both agriculture and heavy equipment manufacturing. However, strength in the region’s aerospace, automotive, advanced manufacturing and healthcare clusters more than offset the declines.”

In the latter arena, growth has come through recent mergers and planned construction.

“Healthcare is growing due to mergers with larger organizations such as Mayo Clinic, UW Health and Mercy Health Systems,” Nicholas says. “Currently, the Rockford region has more than $800 million being invested in healthcare among four providers. Part of that investment is the construction of a new hospital in the Riverside Boulevard and I-90 corridor.”

In response to the region’s growing demand for skilled nurses, Rock Valley College and OSF Healthcare have partnered to build a new facility for the OSF College of Nursing. Classes are expected to begin next spring.

The Chicago Rockford International Airport (RFD) is expanding beyond the realms of freight and passenger service into other areas, including education and the jobs pipeline.

“Aerospace is also a growing cluster, with the new AAR Corp. maintenance, repair and overhaul facility at the Chicago Rockford International Airport, which is the second facility in the U.S. that can accommodate any size of commercial or military aircraft, due to the length of RFD’s 10,000-foot runways,” Nicholas says. “To compete in air cargo, RFD and regional partners took a holistic approach by recruiting a maintenance repair overhaul company and a complementary workforce development relationship with Rock Valley College, which quadrupled its aviation maintenance program and located the facility at the airport to leverage this logistics asset.”

The region boasts four tier-one aerospace suppliers and more than 200 aerospace companies within a 90-minute radius. Members of the Rockford Area Aerospace Network are further solidifying this source of economic development by focusing on supply chain development, collaborative marketing worldwide and workforce development, among other activities.

“The strength of this cluster has generated international attention for the region and aerospace organizations,” Nicholas says.

RAEDC is emphasizing workforce development heavily.

“One of the biggest partnerships this year is the Northern Illinois University/Rock Valley College partnership that allows students to earn a four-year bachelor’s degree in mechanical engineering, electrical engineering or applied manufacturing technology at RVC for $40,000 for the entire four years,” Nicholas says. “This allows students to continue their education while working or interning, without accumulating large amounts of student debt. The first students will start in the fall of 2016.”

Expect to see a boost in local tourism this year with the introduction of the new UW Health Sports Factory, expected to open this May on the east bank of the Rock River. New retail developments, two proposed hotels and additional residential redevelopments promise to draw additional visitors to downtown Rockford.

To Nicholas, the Rockford recovery is the fruit of many years of labor from many people.
“There are many areas of growth in the Rockford region,” he says. “However, that’s not a surprise. Many people and organizations have spent years working together to create business-friendly environments that have made these opportunities possible.”

Trucking Along in Rochelle

Rochelle, Ill., is somewhat of an outlier. While other communities were counting their economic scars after the recession, Rochelle was largely unmarred, says Jason Anderson, director of economic development for the City of Rochelle.

“We never experienced the downturn here,” Anderson says. “It didn’t happen here. We had more economic activity occur between 2007 and today than anybody else has had. We didn’t know the recession happened. We just didn’t feel it. For years we’ve built the infrastructure necessary for good things to happen and it happened in spite of the economy.”

And just as good real estate depends on location, so it is with Rochelle’s economic prosperity.

“It’s being driven by the paradigm that freight rail and commuter rail are in such a conflict once they get past Rochelle and into Chicago that there’s got to be an answer to how you can move product quickly and efficiently into the Midwest market without going all the way into Chicago,” Anderson explains. “But what do you need? You need great access to the interstate, great access to the rail, and it would really help if it already existed because the cost of building all this stuff from the ground up is so cost-prohibitive. Well, in Rochelle, it’s all already here.”

With its proximity to I-39 and I-88, along with existing Class I and Short Line railroads and the Union Pacific intermodal hub, Rochelle can spur economic development throughout Illinois, says Anderson. Thousands of acres of available land allow for easy expansion and future growth. There’s huge potential for Rochelle and the surrounding counties – if more companies offload freight in Rochelle and bypass the crowded Chicago rail system.

“In the mornings, the commuter traffic precedes the freight traffic in Chicago; freight has to sit until all the people get to work,” Anderson says. “We see trains backed up all the way out to here. Products take two and a half days to get from Long Beach, Calif., to Rochelle and then a day and a half to get from here to Chicago, unloaded and delivered ultimately to where they need to go, because of the congestion. Why not have produce arrive in Rochelle in two days, be offloaded here and put in a refrigerated facility where it could be picked up the same day and delivered where it needs to go? You’d save two days and you’re going to have two days less shrinkage of your product. Why should it sit two days rotting in a boxcar? Unload it here and deliver it the same day. I’m getting calls from companies that are looking to get out of Chicago and get their products to market faster, rather than having them sit in the train cars. We’re going to capitalize on that.”

Location is what helped Rochelle to land another growth industry: hydroponic farming.

Mighty Vine led the way two-and-a-half years ago, starting with a 300,000-square-foot greenhouse that’s now producing 4.5 million pounds of fresh tomatoes. The operation works 24 hours a day, 365 days a year.

“They’re looking to expand, and Bright Farms is a second hydroponics facility coming into Rochelle,” says Anderson. “They’ll be growing kale, baby greens, tomatoes and possibly strawberries starting this spring. Fresh produce picked in the morning can go to a market that serves 12 million people within 90 minutes of their facility. It’s about the distribution. They needed a place they could get in and out of, that had plenty of land, and the ability to get product to market fast. Rochelle is the place to do it.”

A Rebound in Freeport

For years, Freeport reeled from double-digit unemployment figures. But this may be the year it emerges from the doldrums.

“Like most of rural America, our area has been hard hit by the 2007-08 recession and it’s been slow to emerge from that prolonged period of negative demand,” says David Young, executive director of Northwest Illinois Development Alliance, a nonprofit organization focused on retaining and expanding business while diversifying the economic base of Freeport, Stephenson County and northwest Illinois.

Things are turning around. The unemployment rate – currently around 6.7 percent – has returned to pre-recession levels. Value-added industries are growing and creating new opportunities for the region.

“The Freeport and Stephenson County economy is driven by manufacturing, value-added agriculture, production agriculture and related industries,” Young says. “Value-added industries that serve consumer and durable goods markets – food manufacturing, transportation equipment, distribution and logistics, and healthcare – are stabilizing and growing globally. These global and national trends will continue to play out in the local economy.”

In particular, Young is excited about recent growth in food manufacturing.

“The majority of the growth is from family-owned private companies,” he says. “Through a combination of continuous investment in automated machinery and equipment, and new product development over the past two or three years, this segment of our economy continues to thrive.”

As more people get back to work, they feel a renewed sense of pride in their community, a factor that has inspired local leadership to focus on revitalizing downtown Freeport.

“This year, we’re focused on an exciting community-driven, collaborative plan to revitalize Freeport’s downtown and a community-driven initiative to brand the City of Freeport and Stephenson County,” Young says. “Pursuing these initiatives in parallel will result in a long-term campaign to promote the area internally and externally as a great place to live, work and play.”

Community revitalization like this helps to create a positive image of Freeport as a place where companies want to be.

“As we move toward full employment, which most economists now peg at 5 percent unemployment, that will create upward pressure on wages, salaries and benefits – which will pump more disposable income into the local and regional economy,” he says. “As a result, the housing market will start to strengthen, employers will start to invest more in employee training to retain workers, and employers that have fully optimized their existing plants and equipment will start to invest in expanding their footprints.”

Rising Tides in Belvidere

In communities that possess large economic anchors, positive growth at one titan can have a ripple effect. Such is the case with Belvidere, which is home to both a Fiat Chrysler automotive assembly plant and a General Mills food plant.

Both businesses are witnessing industry growth, says Jarid F. Funderburg, executive director of Growth Dimensions, an organization that fosters economic opportunity in Belvidere and Boone County.
“General Mills is expanding with new healthy breakfast cereal products,” Funderburg says. “The Fiat Chrysler Automobiles Belvidere Assembly Plant is continually expanding. The very popular Jeep Patriot and Jeep Compass vehicles continue to sell off the charts and they’re the leading export for the northern state-line region.”

At the same time, growth is happening in the light industrial manufacturing arena.

“Ceroni Piping, a local industry support vendor, is making a major multi-million-dollar expansion with a new headquarters to handle its impressive growth,” says Funderburg. “Many light manufacturers continue to operate with full employment.”

Industry isn’t Belvidere’s only economic engine, though. Tourism continues to be a driving force, attracting everyone from hockey players to bicyclists.

“This winter, the Belvidere Township Park District unveiled its new outdoor hockey and skating rink, and it was a huge success,” Funderburg says. “Youth tournaments and leagues have brought a surprising number of new visitors to the downtown district. The new rink has impressed many old and new residents by complementing Doty Park with a new-age look to its Norman Rockwell painting-like scenery.”

Attracting tourist dollars was a major impetus for Belvidere’s recent investment in city infrastructure and downtown streetscape improvements. That investment promises to impact the city’s popular Heritage Days Festival, which city officials expect will attract thousands of people from around the region. Nearby Poplar Grove, Ill., has experienced significant improvements to its downtown business district in an effort to charm the bikers who traverse the Long Prairie Trail.

Given this year’s positive outlook, Funderburg says he expects to focus on attracting not only new businesses but new residents as well.

“We’ll be promoting the incredible quality of life one can find living and working in Belvidere, Poplar Grove, Capron, and other quaint villages,” he says. “Our school districts continue to improve and to offer safe, focused learning with advanced courses to meet the needs of a 21st century workforce. Boone County and the communities within can boast about having some of the lowest crime rates in the region, and the rate continues to drop. Our picturesque countryside, low taxes and friendly local governments continue to attract new residents looking to grow their young families in a healthy, worry-free environment.”

Funderburg sees room for further growth, especially in the small-business arena.

“We have a need for more niche boutique retail and family-friendly eateries,” he says, pointing to many vacant properties downtown. “These charming storefronts have high commuter traffic and, along with the popular annual festivals, offer promising return on investment for well-studied entrepreneurs.”

Moving Forward

By all indications, towns around our region have righted their economic ships. Sure, there’s still work to do, but with lessons from the recession still fresh in their minds, leaders are carrying forth a vision for future growth.

Economically speaking, this year appears to be a time for traveling full steam ahead. If things progress as expected, business and community leaders might need a bigger boat next year.

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