TUPPER: Shift development focus more toward local firmsThough Verifications and Dakota Pork seem about as different as two companies can be on the surface, they had at least one underlying trait in common: Neither company’s leaders had any real tie to Mitchell other than a bundle of incentives.
By: Seth Tupper, The Daily Republic
If you stay a journalist long enough, stories begin to repeat themselves. It happened to me April 26, when my otherwise regular day was interrupted by a tip that Verifications was closing its Mitchell office. A reported 79 people lost their jobs that day.
Nearly seven years earlier, I was interrupted by a similarly sad announcement from the local business community. It was Dec. 14, 2005. I was a reporter, and I had the desk nearest the fax. That morning I happened to grab a document that spit out of the machine. “Dakota Pork Industries, Inc., Plant to Close,” it said in bold lettering. That day, 11 days before Christmas, 295 people were laid off.
What struck me upon hearing the Verifications news was how similar the two situations were. Though Verifications and Dakota Pork seem about as different as two companies can be on the surface, they had at least one underlying trait in common: Neither company’s leaders had any real tie to Mitchell other than a bundle of incentives.
During Dakota Pork’s 18 years in Mitchell, it received at least $1.27 million in low-interest loans from state government and regional development groups. At one point in 2002, then-Gov. Bill Janklow came to Mitchell to announce more assistance for a planned Dakota Pork expansion that, we later learned, never materialized.
Fast forward to 2006. Once again, a governor was in Mitchell to celebrate a business, only this time it was Gov. Mike Rounds and Verifications Inc. Just like the Dakota Pork event in 2002, there was a lot of hand-shaking and back-slapping, and a whole lot of big talk.
And, just like Dakota Pork, a slew of assistance was offered. The local development corporation built the building that housed Verifications, at a cost of about $1.5 million in loans (including some from the Mitchell City Council) plus $500,000 of the corporation’s own money.
Verifications leased the building from the development corporation, but only six years into what was originally a 10-year deal, the company bolted for greener pastures in Arizona, India and the Philippines. The company also closed its Aberdeen office, raising the total number of affected employees in South Dakota to 140.
We’ve been told Verifications will honor its scheduled lease payments. I guess we’ll believe that when we see it, given the company’s rapidly deteriorating track record in Mitchell.
Ultimately, what I see in Dakota Pork and Verifications are two companies that had no heavy anchor in Mitchell. Their corporate offices and top executives were elsewhere, which probably made the decision to close their Mitchell operations easier.
It makes me wonder: When was the last time a sitting governor showed up to celebrate a homegrown Mitchell company? I can’t recall an example quickly, and I think that’s telling.
I won’t name any names, because I’ll undoubtedly leave some out, but we all know the businesses that really built this city. They’re the ones backed by familiar names, and most of their top executives have roots and relatives here. They don’t leave when times get tough, because this is their home. Yet they’re more often taken for granted than celebrated, let alone assisted.
Hopefully, something will be learned from the Dakota Pork and Verifications experiences. After each one, development officials swore their efforts to woo the companies were justified.
That may be so, and I’m not saying we should stop recruiting. But maybe we should put a little more effort into our homegrown entrepreneurs. I know it’s not as sexy. There’s often no pitch to make, no deal to broker, no package of incentives to negotiate, no public announcement, and no chance to stand before a microphone and make a grand speech. Compared to recruitment, growing from within doesn’t sound like much fun.
You know what else isn’t much fun? Being saddled with an empty building and dozens of unemployed people when faraway executives pull the plug on their Mitchell experiment.