The Star Beacon; Ashtabula, Ohio

June 25, 2008

Partnership for economic prosperity

By CARL E. FEATHER - Lifestyle Editor - cfeather@starbeacon.com

Editor’s note: From the inception of the G rowth Partnership, the Star Beacon was a trustee. The newspaper’s leadership chose to drop its membership in 2008.



By CARL E. FEATHER

Lifestyle Editor

When it comes to economic development in Ashtabula County, the buck stops at the doorstep of 17 N. Market St., Jefferson, the Growth Partnership for Ashtabula County.

Housed in a former funeral home, the $600,000 Robert S. Morrison Economic Development Center bills itself as a “one-stop shop” for economic development in Ashtabula County. Ashtabula County Common Pleas Court Judge Al Mackey was a county commissioner at the time Growth Partnership came together, the late 1980s. Prior to forming the partnership, economic development had been handled through Ashtabula County Industrial Development (ACID), which came out the county’s planning department. Mackey says commissioners wanted to delegate that responsibility to a public-private partnership.

“I think there was a feeling we needed to get new faces, get a different approach, and that’s where the Growth Partnership came in,” Mackey says.

That new approach was to hire a full-time director and staff that would work out of a stand-alone office, initially provided by the county. Organizers attempted to fund the partnership through a levy, but after voters twice rejected that approach, the partners turned to a combination of private and public funding. Trustees would kick in an annual membership fee as a monetary expression of their commitment to Ashtabula County’s future.

The group operates as a tax-exempt 501(c)(3) organization under Internal Revenue Service rules.

The partnership was just a babe when Joseph F. Mayernick, formerly the head of the Weirton, W.Va., Chamber of Commerce, was named director in September 1990. Once Mayernick was on board, county leaders gradually transferred economic development to the GP.

Mayernick’s first job was to save the 2,000 jobs that two different reports had projected would be lost during the 1990s. In a letter dated Jan. 9, 2008, from Mayernick to Larry Bottoms, GP president, Mayernick states that the organization was deeply involved in saving Transplastics, Bailey, Webb, CW Ohio, NEO Plastics, Meric Wood Products, Zherco, Future Controls, Titan Aircraft, Foseco, Nordic Air, Conneaut Leather, Glenbeigh, Therapedic Mattress, Tegam, Perfection and several others.

Mayernick says the partnership’s focus has always been to retain existing jobs rather than create new ones; however, the organization’s Form 990 filing with the IRS gives a different picture of the organization’s mission: “community promotion and marketing — coordinate and direct public and private efforts to achieve economic prosperity and improve the quality of life for all Ashtabula County residents.”

GP trustees pay a $5,000 annual fee to support the economic development work. By comparison, it costs $2,000 to get on the membership list of Team OHIO, a statewide economic development group that promotes Ohio.

Mayernick says the group keeps the cost of membership high to minimize the amount of time managing and billing the accounts.

“It’s always a dilemma,” he says. “The real challenge is trying to not spend a lot of time doing service to the members as opposed to services to the county. We’re not a chamber of commerce.”

Mayernick says each trustee contributes $5,000 annually because he or she wants to create “a better community.”

“They are getting nothing more than that,” he says. “They get reports and attend the trustee meetings, but there’s no direct benefit.”

There were 65 trustees in 2007, which would have generated $325,000 in revenue if all trustees paid their fees. According to the organization’s 2005 Form 990 filing, about 80 percent of this money went for salaries, not including those employees paid through Infinity Resources. David French, a GP trustee and past president, says employees who want health insurance and who are in a probation period must go through the staffing services.



Who’s who

The trustee list of Growth Partnership reads like a Who’s Who of Ashtabula County (A complete list is at www.ashtabulagrowth.com). GP’s members include the cities of Ashtabula, Conneaut and Geneva, plus the villages of Orwell and Andover, and the Ashtabula County Board of Commissioners, which, according to Mayernick’s letter to Bottoms, pays $15,000 annually. Ashtabula County Commissioner Deborah Newcomb says a trustee serves on the group’s executive committee and attends that committee’s monthly meeting so county commissioners can review projects. GP also works with commissioners on tax abatement issues.

“That’s why we work so closely with them. If they need to offer incentives, they want to know upfront if it is something we can do. That’s why we are at the table,” says Newcomb.

Mackey says one of the distinct advantages of the partnership is that it allows negotiations with interested parties to be conducted outside public scrutiny. If economic development were a function of government, those negotiations could be subject to Sunshine Law regulations.

“One of the great things about the partnership is the ability to have people deal in confidence of privacy,” he says. “That’s why the Growth Partnership was organized: People could deal in confidence.”

Mayernick states that only 13 percent ($45,000) of the total trustee-generated funding comes from the public sector and 8 percent of the group’s total funding is public. Mayernick says GP’s services are offered to any party that requests them, without regard to membership. For example, Orwell’s KraftMaid, one of the GP’s success stories, is not a member.

Both private and public trustees give the organization high marks for what GP has accomplished in the county, despite a per capita personal-income level that’s the lowest in the lakeshore region. Trustees says per capita income is rising, and it’s a process that must be given time.

“The Growth Partnership is an important part of raising the wages, the per capita here,” says Rick Coblitz, whose business, A. Louis Supply, is a member. “They are trying to bring in better-paying industries. In the beginning, it was anything we could get in here to provide a job. But in more recent years, they have been trying to bring in better-paying ones.”

Rick Selip, president of Grand River Rubber and a trustee, says the organization’s mission has evolved.

“They have gone from a crisis mode to a reaction mode and are now going into the creative mode,” Selip says.

Members of the organization give the group high marks for cooperation and expertise, living up to its claim of being a one-stop shop that can help entrepreneurs cut through municipal, county and state red tape.

“There have been several times I’ve called Joe, and he’s helped me with projects we’ve worked on,” says James Timonere, executive director of the Ashtabula Area Chamber of Commerce. “They are the first people I call because of all the contacts he has. I do believe we would not have the new industrial park in the city if it were not for them. Janet Discher (now employed by the county) of Growth Partnership did a lot of work on that.”



Ashtabula County’s economy is tightly woven on a loom powered by the fear of losing one’s piece of the fabric, whether you are an hourly employee or a CEO. Therefore, critics of Growth Partnership — even most of those who have left the organization — refuse to be quoted for this story, despite a pervasive feeling that the organization has evolved into a “good old boys club” with a steep membership fee that limits participation and access to the inside track on upcoming development projects.

David Thomas of the International Brotherhood of Electrical Workers Local 673 says if he has one criticism of GP, it is the lack of union building-trades representation in the membership.

“Where Growth Partnership could do a better job is by letting somebody from building trades in on discussions so they’d know what was going going on (with proposed development projects),” he says. “We got a lot members, trades people who live in the county.”

Thomas says the union was originally part of GP but pulled out several years ago.

“The $4,000 it cost to join — we were not getting work out of it,” says Randall Bates, vice president of the Ashtabula County AFL-CIO. “They always used the same people, so there was no reason to belong.”

Thomas says of the three counties covered by the IBEW local, Ashtabula County has suffered the most in recent years. Members can find work in retrofitting power plants along the Ohio River, but union jobs have been scarce in Ashtabula County.

Some projects have used union labor, including the Geneva State Park Lodge construction and work at Millennium Inorganic Chemicals (Cristal). But some of the biggest projects went to nonunion, even out-of-state, contractors. The bulk of the electrical work at the prison in Conneaut went to a Pennsylvania firm; the Save-A-Lot distribution center electrical work went to a nonunion firm from Kentucky, says Thomas.

“Growth Partnership does not seem to support union labor,” Bates says.

Union representation has been lacking at new manufacturing facilities brought into the county. Mike Martino, a spokesman with the United Food and Commercial Workers Union, Local 880, in Cleveland, says he’s had at least one meeting with a worker at the Save-A-Lot Distribution Center in Austinburg regarding organizing the warehouse’s workers. Issues include the rising costs of benefits and favoritism.

“There’s a big problem with that (favoritism),” Martino says.

Efforts to organize the warehouse workforce have failed.

“It’s tough to stir the rest of the guys to do something, because they are scared,” he says.

The trustees who put forth their $5,000 annually are overwhelmingly favorable to the organization. Local politicians are likewise overwhelmingly positive about the organization and its ability to serve as a liaison between government and industry.

Ashtabula City Manager Anthony Cantagallo feels Mayernick is doing a good job, given the relatively uneducated workforce in the county.

“It’s hard to get cream when you are not working with much milk,” Cantagallo says.

But at least one county commissioner candidate has a different view.

“The last several years I’ve had the opportunity to travel the state, and I’ve seen a lot of areas that are doing very well, which leaves me to question all of the economic ‘win-win’ situations imposed and implemented here during the last two decades,” says county commissioner candidate Patrick O’Brien. “I think the Ashtabula County economic situation speaks for itself.”



Whatever criticisms and concerns GP may raise locally, they do not percolate to the regional and state levels, where Growth Partnership is held in high esteem. The partnership was named economic development association of the year in 1995 by the Ohio Development Association.

As the face of GP, Mayernick has also gained great respect in economic development circles. In 2001, Mayernick received the Ohio Department of Development Director’s Award.

Carin Rockind, vice president of marketing and communications for Team NEO, says Mayernick has begun attending that organization’s meetings and it is pleased to have his input and expertise from this side of the 16-county region covered by Team NEO.

“Joe is great,” says Rockind. “He has lots of good ideas, and we really look forward to him participating more.”

“I personally think he does an outstanding job,” says Larry Bottoms, the president of Growth Partnership and mayor of Orwell. The village is a member of Growth Partnership, and Bottoms says GP has helped bring millions of dollars of investment into the community.

Mayernick says that Growth Partnership nailed its original goal of saving 2,000 jobs and went on to create many more in its nearly 20 years. As for any criticism of the local economy, he and many of the trustees offer this thought: “What if we had not been here?”



The Issue:

Voters were unwilling to fund the Growth Partnership when it was set up in the late 1980s, forcing a private-public funding model that requires a hefty fee for participation, $5,000, that excludes small businesses.



Why it matters:

The group is the door to economic development in the county; most development discussions are held below the public radar screen until the deals are closed.



Reality check:

Growth Partnership for

Ashtabula County

Mission: To achieve economic prosperity and improve the quality of life for all Ashtabula County residents.

Executive director:

Joseph Mayernick

Type of organization: 501(c)(3) not-for-profit

Gross receipts (2005): $533,171

Direct public support: $374,864

Indirect public support: $62,819

Revenue from awards day: ($2,398)

Office rental income: $6,525

Salary expenses, including payroll taxes:

$273,910

Contracted services: $99,389

Marketing expense: $10,883

Auto expense:

$5,205

Headquarters value, including fixtures/furniture: $700,000

Debt on above:

$419,749

Source: GP’s 2005 IRS Form 990, available online at the Star Beacon Web site