It takes more than ‘good bones’ — Maine business leaders explore lessons from Utah’s economic success

Alan Hall, a Utah-based venture capitalist and economic development expert, spoke to around 300 Maine business leaders about how Maine could build an economic development strategy in Portland Tuesday.
Darren Fishell | BDN
Alan Hall, a Utah-based venture capitalist and economic development expert, spoke to around 300 Maine business leaders about how Maine could build an economic development strategy in Portland Tuesday. Buy Photo
Posted May 20, 2014, at 7:23 p.m.
Last modified May 21, 2014, at 7:12 a.m.
On Tuesday, Andrea Cianchette Maker, lobbyist for the Maine Real Estate and Development Association and Pierce Atwood attorney, leads a panel discussion in Portland about creating an economic development strategy for Maine. The panel included, from left, Peter DelGreco, president and CEO of Maine and Co.; Kent Peterson, president and CEO of Fluid Imaging Technologies; Josh Benthien, partner at Northland Enterprises; John Everets, chairman and CEO of The Bank of Maine; Petur Petersen, Portland station manager for Eimskip; and John Fitzsimmons, president of the Maine Community College System.
Darren Fishell | BDN
On Tuesday, Andrea Cianchette Maker, lobbyist for the Maine Real Estate and Development Association and Pierce Atwood attorney, leads a panel discussion in Portland about creating an economic development strategy for Maine. The panel included, from left, Peter DelGreco, president and CEO of Maine and Co.; Kent Peterson, president and CEO of Fluid Imaging Technologies; Josh Benthien, partner at Northland Enterprises; John Everets, chairman and CEO of The Bank of Maine; Petur Petersen, Portland station manager for Eimskip; and John Fitzsimmons, president of the Maine Community College System. Buy Photo

PORTLAND, Maine — In response to Maine’s seemingly entrenched last-place ranking for business friendliness by Forbes magazine, about 300 of the state’s business leaders heard suggestions Tuesday from a entrepreneur based in first-place Utah.

Alan Hall — a Utah business leader, economic development expert and active Republican donor — identified eight characteristics he considers “pillars of a high growth economy,” including a business-friendly government, an educated workforce, anchor industries and cheap power and land.

Hall, founder of the venture capital firm Mercato Partners and the economic development nonprofit Grow Utah, suggested Maine look to similar states to gauge the success of its economy and admitted Maine has not been considered among Utah’s peer comparison group.

The suggestions resurrected political battles from the latest legislative session between Republican Gov. Paul LePage and Democrats and left Maine business leaders wondering what coastal northeastern Maine has in common with the arid, landlocked Utah.

The head of the Maine Real Estate and Development Association, which hosted the forum, said his organization hopes the event Tuesday will prompt development of a long-term strategic plan for the state’s economy.

“We brought Alan here to start the conversation,” said MEREDA’s outgoing president Drew Sigfridson, managing partner at CBRE The Boulos Co.

Sigfridson said whether his group would lead development for such a strategic plan remains to be determined.

Hall’s speech struck its strongest chord with politicians in the audience, reviving squabbles over economic development proposals during the recently concluded legislative session. Hall identified a low corporate tax rate, low cost of power, conservative values, a Republican-led government and a law abolishing mandatory union bargaining fees — called “right-to-work” by supporters — as points in favor of the state.

“How great is it that our attempts to fix cracks in the foundation [of Maine’s economy] have been right on point?” said George Gervais, commissioner of the state’s Department of Economic and Community Development, after Hall’s keynote at the Holiday Inn by the Bay.

Gervais said he took from the talk support for proposals such as Gov. Paul LePage’s Open for Business Zones plan, which aimed to create right-to-work zones and incentives for large companies to relocate here.

State Rep. Anne-Marie Mastraccio, D-Sanford, a member of legislative committees that deal with workforce, labor and development issues, said the talk was politically charged.

“[Hall is] a Republican conservative who’s going to say what the governor wants him to say,” Mastracchio said.

While the talk renewed political disagreements, the audience and a panel of five businessmen plus the head of Maine’s community college system agreed the state should move ahead with some type of economic planning. But how it moves forward and what it will take from examples like Utah raised new questions.

“One word defines Utah, and that is homogeneity; and I’m not talking about demographics but economic geography,” said audience member Brad Jackson, executive director of the Kennebec Regional Development Authority and Oakland business park FirstPark. “The difficult thing with [creating] one plan in Maine is that we have distinct interests.”

In response to Jackson’s question, moderator Andrea Cianchette Maker, MEREDA’s lobbyist and a Pierce Atwood attorney, polled the audience whether Maine should develop one statewide economic development strategy. About half the audience raised hands; the other half favored creating regional development plans.

Discussion of the Forbes ranking, whose criteria is unknown, prompted the forum, but it was not a core topic of discussion for the panelists. One real estate developer dismissed the last-place rank.

“When my partner and I look at potential real estate developments, one thing we look at is the ability to add value. To do that, you need a good location or good bones,” said Josh Benthien, a partner at developer Northland Enterprises. “I don’t feel like we’re 50th: I think we’ve got good bones.”

Panelists’ themes centered on how to boost the state’s economy by focusing on education, retaining businesses started here and attracting new businesses and people to the state.

John Fitzsimmons, head of the Maine Community College System, led discussion of education initiatives that stand to help the state’s economy. He was joined by business leaders who expressed hopes for collaboration with the state’s education system.

Kent Peterson, president and CEO of Fluid Imaging Technologies, the Scarborough-based maker of cell and particle analysis tools, said he’d like to see more research and development collaboration between state government, southern parts of the state and the University of Maine’s flagship campus in Orono.

Petur Petersen, the Portland station manager for Icelandic shipping company Eimskip, called for Maine to look to other countries for ideas about higher education, arguing higher student debt hampers work opportunities after college. Fitzsimmons added Maine’s median income is the lowest in New England, making affordability of living here difficult with high student loan debt.

Peterson, with Fluid Imaging, reintroduced a proposal for the state find a way to subsidize student loan payments. Fitzsimmons suggested the state consider abolishing higher out-of-state tuition rates altogether at its community colleges and universities, in part because he said policies that provide financial benefits after college don’t help students get over the “sticker shock” when considering initial enrollment.

For real estate developments and existing businesses, developer Benthien said keeping regulations stable is important. During the last legislative session, his industry fended off curtailment of state tax credits for projects to repurpose historic buildings.

“The rents [in Maine] don’t support new development or historic rehab of old buildings with traditional debt and equity [financing],” said Benthien, who developed real estate in New York prior to coming to Maine. “When you question whether the state credit will continue or will be grabbed back, then you don’t look at those new projects.”

Petersen, with Eimskip, cited geographic challenges Maine will need to address, too.

“One thing we’ve not really spoken about in how you attract companies here is how do they get to the markets?” Petersen said, noting his company’s shipping service has opened new access to around 350 million potential customers in Europe.

“Maine businesses should start looking more toward Europe or not just focus on domestic markets,” he said, noting that the state can still make rail and other infrastructure improvements to lower the cost of selling into domestic markets.

While attention also turned to attracting new businesses to Maine, some raised concern that similar discussions of business incentives and economic strategies in states like Utah threaten to lure Maine businesses away.

Last summer, a report issued by the organization Good Jobs First, which has questioned whether such competition between states is good, characterized jockeying between states as a “race to the bottom.”

John Everets, chairman and CEO of The Bank of Maine, said it’s a competition to which Maine should be attuned.

“I think you’re either very aggressive in that direction or your companies are being recruited, and I think what we’ve not talked about today is Maine at risk of losing those companies because of the policies of doing business here or the regulatory environment,” Everets said.

CORRECTION:

A previous version of this story has been corrected. The Maine Real Estate and Development Association was erroneously referred to as the Maine Real Estate and Developers Association.

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